M A K E A DIFFERENCE

Transcription

1 M A K E A DIFFERENCE First Half Year Report January June 2015

2 / Table of Contents / Table of Contents 01 TO OUR SHAREHOLDERS First Half Year Results at a Glance 3 Financial Highlights 5 Operational and Sporting Highlights 6 Letter from the CEO 8 Our Share INTERIM GROUP MANAGEMENT REPORT Group Business Performance 16 Economic and Sector Development 16 Income Statement 19 Statement of Financial Position and Statement of Cash Flows 27 Business Performance by Segment 31 Western Europe 31 North America 33 Greater China 34 Russia/CIS 35 Latin America 36 Japan 37 MEAA (Middle East, Africa and Other Asian Markets) 38 Other Businesses 39 Subsequent Events and Outlook INTERIM CONSOLIDATED FINANCIAL STATEMENTS (IFRS) Responsibility Statement 48 Consolidated Statement of Financial Position 49 Consolidated Income Statement 51 Consolidated Statement of Comprehensive Income 52 Consolidated Statement of Changes in Equity 53 Consolidated Statement of Cash Flows 54 Notes ADDITIONAL INFORMATION Executive and Supervisory Boards 72 Financial Calendar 2015/ Publishing Details & Contact 75

3 1 To Our Shareholders First Half Year Results at a Glance First Half Year Results at a Glance / 01.1 / 01 / First Half Year Results at a Glance ( in millions) Change Second quarter 2015 Second quarter 2014 Change Group 1) Net sales 7,990 6, % 3,907 3, % Gross profit 3,897 3, % 1,889 1, % Gross margin 48.8% 49.2% (0.4pp) 48.3% 49.2% (0.9pp) Operating profit 2) % % Operating margin 2) 7.2% 7.6% (0.4pp) 6.0% 6.4% (0.4pp) Western Europe Net sales 2,104 1, % % Gross profit 1, % % Gross margin 47.7% 46.0% 1.7pp 47.2% 45.7% 1.5pp Segmental operating profit % % Segmental operating margin 21.9% 19.1% 2.8pp 18.8% 15.0% 3.8pp North America Net sales 1, % % Gross profit % % Gross margin 36.6% 36.8% (0.2pp) 36.7% 36.2% 0.4pp Segmental operating profit 8 42 (80.9%) (42.7%) Segmental operating margin 0.6% 4.2% (3.6pp) 2.6% 5.5% (2.9pp) Greater China Net sales 1, % % Gross profit % % Gross margin 57.4% 58.7% (1.4pp) 59.0% 60.9% (1.9pp) Segmental operating profit % % Segmental operating margin 36.5% 35.6% 0.9pp 36.5% 34.0% 2.5pp 3 Russia/CIS Net sales (32.0%) (30.7%) Gross profit (37.6%) (31.9%) Gross margin 56.0% 61.0% (5.0pp) 59.8% 60.8% (1.1pp) Segmental operating profit (58.1%) (44.0%) Segmental operating margin 9.0% 14.6% (5.6pp) 15.0% 18.5% (3.6pp) Latin America Net sales % % Gross profit % % Gross margin 42.5% 40.0% 2.5pp 42.6% 39.6% 3.0pp Segmental operating profit % % Segmental operating margin 14.4% 14.0% 0.4pp 15.1% 13.3% 1.8pp Japan Net sales % (1.9%) Gross profit % % Gross margin 47.8% 44.7% 3.1pp 48.2% 45.5% 2.7pp Segmental operating profit % (4.5%) Segmental operating margin 16.1% 14.4% 1.7pp 16.8% 17.2% (0.4pp) Rounding differences may arise in percentages and totals. 1) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business. 2) 2015 excluding goodwill impairment of 18 million in the first quarter.

4 To Our Shareholders First Half Year Results at a Glance / 01.1 / 01 / First Half Year Results at a Glance ( in millions) Change Second quarter 2015 Second quarter 2014 Change MEAA (Middle East, Africa and other Asian markets) Net sales 1, % % Gross profit % % Gross margin 51.7% 52.7% (1.1pp) 50.5% 51.8% (1.3pp) Segmental operating profit % % Segmental operating margin 29.0% 29.7% (0.7pp) 26.0% 24.1% 1.9pp Other Businesses 1) Net sales % (1.1%) Gross profit (3.3%) (16.9%) Gross margin 34.2% 37.4% (3.2pp) 30.8% 36.7% (5.9pp) Segmental operating profit (45) (19) (141.6%) (40) 2 (1,979.0%) Segmental operating margin (6.1%) (2.7%) (3.4pp) (10.9%) 0.6% (11.5pp) Sales by Brand adidas 6,533 5, % 3,180 2, % Reebok % % TaylorMade-adidas Golf (3.1%) (12.0%) Reebok-CCM Hockey % % Rounding differences may arise in percentages and totals. 1) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business. 4

5 2 To Our Shareholders Financial Highlights Financial Highlights / 01.2 / 02 / Financial Highlights (IFRS) Change Second quarter 2015 Second quarter 2014 Change Operating Highlights ( in millions) Net sales 1) 7,990 6, % 3,907 3, % EBITDA 1) % % Operating profit 1) 2) % % Net income attributable to shareholders 2) 3) % % Key Ratios (%) Gross margin 1) 48.8% 49.2% (0.4pp) 48.3% 49.2% (0.9pp) Operating expenses in % of net sales 1) 42.8% 43.5% (0.7pp) 44.0% 44.6% (0.6pp) Operating margin 1) 2) 7.5% 7.6% (0.2pp) 6.0% 6.4% (0.4pp) Effective tax rate 1) 2) 31.8% 29.0% 2.9pp 35.1% 29.2% 6.0pp Net income attributable to shareholders in % of net sales 2) 3) 4.8% 5.1% (0.2pp) 3.7% 4.2% (0.5pp) Average operating working capital in % of net sales 1) 4) 21.6% 22.0% (0.4pp) Equity ratio 43.5% 46.4% (2.9pp) Net borrowings/ebitda 1) 5) Financial leverage 17.2% 8.2% 9.0pp Return on equity 3) 6.6% 6.3% 0.3pp Balance Sheet and Cash Flow Data ( in millions) Total assets 12,754 11, % Inventories 2,927 2, % Receivables and other current assets 3,236 2, % Working capital 2,510 1, % Net borrowings % Shareholders equity 5,548 5, % Capital expenditure (48.1%) (21.1%) Net cash used in operating activities 3) (31) (151) (79.3%) 5 Per Share of Common Stock ( ) Basic earnings 2) 3) % % Diluted earnings 2) 3) % % Net cash used in operating activities 3) (0.15) (0.72) (78.6%) Dividend Share price at end of period (7.2%) Other (at end of period) Number of employees 1) 54,335 51, % Number of shares outstanding 200,197, ,216,186 (4.3%) Average number of shares 202,897, ,216,186 (3.0%) 201,644, ,216,186 (3.6%) 1) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business. 2) 2015 excluding goodwill impairment of 18 million in the first quarter. 3) Includes continuing and discontinued operations. 4) Twelve-month trailing average. 5) EBITDA of last twelve months. 03 / net sales 1) ( in millions) 04 / net income attributable to shareholders 1) ( in millions) , , , ) ) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business. 1) Includes continuing and discontinued operations. 2) Excluding goodwill impairment of 18 million.

6 3 To Our Shareholders Operational and Sporting Highlights Operational and Sporting Highlights / 01.3 / OPERATIONAL AND SPORTING H I G H L I G H T S Q2 APRIL MAY Reebok teams up with international supermodel Miranda Kerr for the Skyscape March in Tokyo. The Skyscape is Reebok s key franchise in walking footwear, taking comfort and style to a new level CCM releases the Ribcor skate line featuring Reebok s legendary Pump technology. Providing skaters with a re-engineered shape, Ribcor features a more customised fit and maximum heel lock adidas partners with Spotify to launch the adidas Go running app, providing a personalised playlist to match the runner s stride Reebok and DuPont Protection Technologies announce a multi-year trademark licence agreement allowing the innovation of strong, light and durable athletic apparel and gear for CrossFit athletes Reebok is recognised for its innovative digital marketing. The brand takes home the 2014 Digital Marketer of the Year at the Footwear Industry Achievement Awards adidas opens its Boston RunBase, an urban runners location, helping runners to meet and interact with running experts and elite athletes as well as experience adidas products and services For the fifth time, the adidas Group is awarded the Female Recruiting Award at the Women & Work fair, the biggest career fair in Germany FC Bayern Munich and adidas extend their successful long-term partnership until adidas launches the world s lightest cycling kit weighing in at a mere 200g. The adidas adizero cycling apparel has been designed to help riders quicken their pace up challenging gradients In celebration of the ten-year anniversary of the collaboration with Stella McCartney, the designer visits the first adidas by Stella McCartney women s concept store in Seoul to meet with consumers as well as fitness and health influencers. 6

7 To Our Shareholders Operational and Sporting Highlights / 01.3 / adidas launches its All-White Ultra Boost in key cities. The exclusive design and its elastic Primeknit material make the running shoe a special eye-catcher. OPERATIONAL AND SPORTING H I G H L I G H T S Q2 JUNE adidas gives a group of young footballers in Berlin a first impression of The Base, the brand s first urban football centre, which extends over 3,500m² Reebok takes home two awards at the 2015 Cannes Lions International Festival of Creativity for the creation of the Be More Human Digital Experience Reebok Russia takes the Be More Human message to the next level with more than 3,000 people pushing themselves to their physical limits through a 4.5km obstacle course in Moscow adidas and Parley for the Oceans present the first shoe developed in their recently announced collaboration at a UN Climate Change event in New York City. The shoe s upper is entirely made of yarns reclaimed and recycled from ocean waste adidas revolutionises its football footwear offer by introducing X and Ace. The boots represent two distinct types of players: the game changers and the play makers the ones who cause chaos and the ones who control the game CCM launches its new brand platform Made of Hockey to strengthen the brand and better connect and engage with its core consumer. The platform will be used to promote hockey as a sport and includes an online shop adidas Originals and Kanye West present the second sneaker developed in their close collaboration: Yeezy Boost 350. The shoe is designed to be simple and comfortable, featuring an entirely knitted upper Reebok and the UFC unveil the first #UFCFightKit in New York City. The launch marks a cornerstone moment for both the sport of UFC and the Reebok brand TaylorMade announces a partnership with Microsoft. Microsoft will launch a golf tile on the Microsoft Band, aimed at enhancing the golfer s performance and overall experience through advanced analytics and statistical tracking.

8 4 To Our Shareholders Letter from the CEO / 01.4 / Letter from the CEO Herbert Hainer ADIDAS GROUP CEO 8 When we introduced our new strategy Creating the New at the end of March we told you that it will take time to see all of our investments paying off and the full benefits coming through. But we also promised that this new approach together with our fresh organisational set-up will show first positive results already this year. And the second quarter is without a doubt proof positive for that. / Sales were up a robust 5% currency-neutral. In euro terms, sales were even up an impressive 15% and increased by more than 500 million to 3.9 billion. / We recorded another quarter with strong growth at adidas and Reebok, as revenues increased 8% and 6%, respectively. / Gross margin decreased 0.9 percentage points to 48.3%. While higher input costs and negative currency effects also played a role here, more than half of the decline was due to lower product margins at TaylorMade-adidas Golf. / Operating margin was down 0.4 percentage points to 6.0% a direct consequence of the gross margin decline. / Net income from continuing operations improved 2% to 146 million.

9 To Our Shareholders Letter from the CEO / 01.4 / I am really pleased to see how well adidas and Reebok are resonating with consumers, which is reflected in their second quarter performance. Reebok with its 6% top-line improvement now has nine consecutive quarters of growth in the books, a clear testimony that the brand is resonating well with the Fit Generation. Even more pleasing is the fact that Reebok s growth is directly linked to the key fitness categories, with strong growth in training, running and studio. After a very successful start to the year in Q1, adidas grew a strong 8% in the second quarter which is even more impressive considering the record World Cup related sales we were comparing against. In this regard, of particular note is the double-digit sales increase we witnessed in Western Europe and Greater China as these two markets had already seen double-digit growth rates in the prior year period. Let me remind you that Western Europe was a key improvement area for us 18 months ago. The second quarter results now clearly show that our efforts and investments in our home territory are paying off. We expect this momentum to continue throughout the second half of the year. As a result, our business in Western Europe is projected to grow at a double-digit rate in As will our business in China, where we clearly don t see an end of our growth story despite the recent economic challenges. Quite the contrary: more and more Chinese consumers are attracted by sports and a sporting lifestyle and they are willing to spend on strong international brands such as ours. 9 The solid growth at adidas is also reflected in the praise key adidas products such as Boost, our new football silos Ace and X, the Superstar and its various special editions or Kanye West s Yeezys have received from sneakerheads as well as vertical sports and lifestyle media around the world. On the football footwear side, sales during the second quarter increased a strong 17%, supported by the highly anticipated and very successful introduction of our new football footwear franchises Ace and X, which are featured in the new Be the Difference football reset campaign. We unveiled Ace and X during the UEFA Champions League Final in Berlin where we have also opened the Berlin Base, our first urban football centre. The Base is set to become the next must-visit spot for our football consumers in Germany and we will utilise the venue as an open-source location for upcoming football players to get involved in projects such as the testing and development of unreleased products. The growth in our running business was strongly supported by the successful launch of the Ultra Boost, the greatest running shoe of all time. The feedback we are receiving from both our consumers and our key retail partners is overwhelming. In particular, the all-white version of the Ultra Boost was named as the best all-white sneaker of 2015 in several sneaker blogs and sold out in just three days. We are very satisfied with the development of our Boost franchise, and I am sure that the best is yet to come.

10 To Our Shareholders Letter from the CEO / 01.4 / At adidas Originals, the strong performance from the first quarter even accelerated in Q2. The adidas Superstar in general and the Supercolor collection by Pharrell Williams in particular are resonating tremendously with the lifestyle consumer. Consequently, sell-through rates spiked across all channels across the globe, creating halo effects far beyond the product itself. And let s not forget the huge successes around the other Originals footwear franchises, such as the ZX Flux, the Stan Smith or the Tubular, which continue to do extremely well. At adidas NEO, the momentum we are seeing is just as strong, with sales growth also accelerating compared to the first quarter, supported by the Selena Gomez summer collection, which again delivered huge engagement levels and activation amongst young fashion consumers. Unfortunately, there is also one area that is still not performing according to our expectations. Clearly, over the last couple of months, the business development at TaylorMade-adidas Golf has not lived up to our initial projections. After we had taken some painful measures in 2014 to resize our business and postponed most product launches to pave the way for a healthier retail environment, we expected the market and our business to return to growth this year. And while the number of rounds being played reversed their downwards trend recently, suggesting that the overall environment has indeed improved somewhat, the situation at the point of sale remains more challenging than we had initially projected. At the same time, our two major product introductions the R15 and the AeroBurner did not resonate as well with the golf consumer as we would have hoped. As a result of these developments, our sell-through rates were not as strong as expected, leading to earlier and more pronounced promotional activity, which is clearly reflected in the 26% top-line decline during the second quarter as well as significant margin pressure. 10 I know this development is disappointing for you. And rest assured that we as a management team are just as disappointed about it as you are. The current performance has shown that we need to go much deeper in order to bring TaylorMade-adidas Golf back on track. And this is exactly why we will make every effort to develop the right measures to drive the turnaround of our golf business. In addition, we have engaged with an investment bank for the purpose of analysing future options for the company s golf business, in particular the Adams and Ashworth brands. But we are of course not going to wait for these results before starting to react to the challenges. In fact, over the last few weeks we have not only developed a major turnaround plan, we have also already started to implement it as we are fully aware that we don t have any time to lose. The set of measures, which go way beyond our initiatives from last year, is aimed at enhancing the company s pricing, promotion and trade patterns, as well as optimising the supply chain and product costs. Furthermore, we will reprioritise the global marketing spend and generate significant operating overhead savings at TaylorMade-adidas Golf. The implementation of all these measures continues. The outcome will and has to be a more nimble and profitable company.

11 To Our Shareholders Letter from the CEO / 01.4 / When talking about our golf business, you should also keep one thing in mind: Even in this challenging market, our footwear and apparel business with adidas Golf grew in the first half of 2015 and continues to deliver solid returns. To me, this is a clear testament to the strong position adidas enjoys in sport. There were a lot of other areas where we made major progress over the last couple of months. Last week, for example, we completed the divestiture of Rockport, which will allow us to focus our resources even more on our core competency sport and on the highest-potential opportunities for our Group to drive sustainable and profitable growth. In addition, in June, we finished the second tranche of our share buyback programme. As a result, only nine months after having launched the shareholder return programme in the fourth quarter of last year we have already concluded 40% of the total 1.5 billion that we intend to distribute to our shareholders by the end of In light of all that, I am convinced that 2015 will be a successful year for the adidas Group. The weakerthan-expected performance of our golf business will not put the Group s top- and bottom-line guidance for 2015 at risk. TaylorMade-adidas Golf is only a small part of our business and, as mentioned before, the performance of our core brands adidas and Reebok is exceeding our initial expectations. With a full product and marketing pipeline and a strong order book on hand, we are very confident that the robust momentum of adidas and Reebok will continue throughout the second half of the year and fuel the targeted top- and bottom-line growth for the Group. 11 HERBERT HAINER adidas Group CEO

12 5 To Our Shareholders Our Share / 01.5 / Our Share In the second quarter of 2015, the DAX-30 as well as most international stock markets could not maintain the positive momentum from the previous quarter. In particular, the DAX-30 experienced a volatile and, towards the end of the quarter, negative development, which ultimately led to a 9% decline during the three-month period between April and June. The adidas AG share was not able to fully escape the overall negative equity market sentiment, losing 7% in the second quarter of Greek debt crisis weighs on international stock markets in the second quarter In the second quarter of 2015, most international stock markets could not maintain the positive momentum from the previous quarter. In particular, the Greek debt crisis, the strengthening of the euro, ongoing discussions about the Federal Reserve s first increase in key interest rates as well as lacklustre Chinese economic data put pressure on global equity markets in general and European stocks in particular. Improving economic data in the euro area, the recovery of the US economy and the broadening of China s expansionary monetary policy was only able to temporarily support international equity markets. As a result, the DAX-30 and the MSCI World Textiles, Apparel & Luxury Goods Index lost momentum from the prior quarter, declining 9% and 1%, respectively, compared to the end of March adidas AG share suffers during the second quarter as a result of overall equity market weakness At the beginning of the second quarter, the adidas AG share continued its positive trend, supported by the Group s new strategic business plan until 2020, unveiled on March 26, followed by subsequent management roadshow activities throughout April. This led to a new high of the adidas AG share for the first half of 2015 at on April 10 and to an outperformance of the DAX-30, which suffered from a strengthening of the euro. On May 5, the adidas Group released strong first quarter results which were well above market expectations. However, the overall negative market sentiment during the day weighed on the adidas AG share, which lost 2% on the day of the announcement. During the remainder of May, the adidas AG share saw ongoing pressure due to several external factors. In particular, the increasing difficulties between Greece and its creditors acted as a key headwind. In June, the overall equity market weakness and high volatility levels caused by the fear of a Greek default also impacted the development of the adidas AG share. On June 24, the adidas Group held its first IR Tutorial Workshop, providing further insight into its strategic business plan by detailing more specific information about the strategic aspirations of its core adidas categories football, running and Originals. As the workshop was very well received by market participants, the adidas AG share was able to outperform equity markets following the event. As a consequence, the adidas AG share finished the second quarter at 68.65, representing a decrease of 7% compared to the end of March / Historical performance of the adidas AG share and important indices at June 30, 2015 (in %) YTD 1 year 3 years 5 years Since IPO adidas AG 19 (7) DAX MSCI World Textiles, Apparel & Luxury Goods 1 (2) Source: Bloomberg.

13 To Our Shareholders Our Share / 01.5 / adidas AG share at a glance 06 / Share price development in ) Dec. 31, 2014 June 30, ) Index: December 31, 2014 = 100. adidas AG DAX-30 MSCI World Textiles, Apparel & Luxury Goods Index 07 / The adidas AG share Important indices Number of shares outstanding First half average 202,897,613 At June 30 1) 200,197,417 Type of share Registered no-par-value share Initial Public Offering November 17, 1995 Stock exchange All German stock exchanges Stock registration number (ISIN) DE000A1EWWW0 Stock symbol ADS, ADSGn.DE / DAX-30 / MSCI World Textiles, Apparel & Luxury Goods / Deutsche Börse Prime Consumer / Dow Jones Sustainability Indices (World and Europe) / ECPI Ethical Equity Indices (Euro and EMU) / Ethibel Sustainability Indices (Excellence Europe and Excellence Global) / Euronext Vigeo (Eurozone 120, Europe 120) / FTSE4Good Index Series / MSCI Global Sustainability Indices / MSCI SRI Indices / STOXX Global ESG Leaders 1) All shares carry full dividend rights.

14 To Our Shareholders Our Share / 01.5 / Number of ADRs increases The number of Level 1 ADRs (American Depository Receipts) further increased during the threemonth period compared to the end of March At June 30, 2015, 10.3 million ADRs were outstanding, compared to 9.1 million at the end of the first quarter of The Level 1 ADR closed the quarter at US $ 38.46, reflecting a decrease of 3% compared to the end of March The less pronounced decrease of the Level 1 ADR price compared to the ordinary share price was due to the depreciation of the US dollar versus the euro at the end of the second quarter of 2015 compared to the end of March Dividend of 1.50 per share paid At the Annual General Meeting (AGM) on May 7, 2015, shareholders approved the adidas AG Executive and Supervisory Boards recommendation to pay a dividend of 1.50 per share for the 2014 financial year (2013: 1.50). The dividend was paid on May 8, Based on the number of shares outstanding at the time of our AGM, this represents a dividend payout of 303 million (2013: 314 million) and a payout ratio of 53.4% of net income attributable to shareholders, excluding goodwill impairment losses, compared to 37.4% in the prior year. As part of its new five-year strategic business plan, the adidas Group intends to pay out between 30% and 50% of net income attributable to shareholders going forward (previously: 20% 40%). 08 / adidas AG high and low share prices per month 1) (in ) Jan. 1, 2015 June 30, day moving average High and low share prices Source: Bloomberg. 1) Based on daily Xetra closing prices.

15 To Our Shareholders Our Share / 01.5 / Shareholder return programme continued On March 5, 2015, adidas AG announced the commencement of the second tranche of the share buyback programme with an aggregate acquisition cost of up to 300 million. Within the second tranche up to and including June 15, 2015, adidas AG bought back 4,129,627 shares. This corresponds to a notional amount of 4,129,627 in the nominal capital and consequently 1.97% of the company s nominal capital. The average purchase price per share for this second tranche was A total price of 299,999,992 (excluding incidental purchasing costs) was paid to buy back the shares. The total number of shares bought back so far by adidas AG within the framework of the shareholder return programme resolved upon on October 1, 2014 and initiated with the first tranche of the share buyback programme on November 7, 2014 amounts to 9,018,769 shares. This corresponds to a notional amount of 9,018,769 in the nominal capital and consequently 4.31% of the company s nominal capital. Changes in shareholder base In the second quarter of 2015, adidas AG received several voting rights notifications according to 21 section 1, 25 section 1 or 25a section 1 of the German Securities Trading Act (Wertpapierhandelsgesetz WpHG). All voting rights notifications received can be viewed on our corporate website. voting_rights_notifications Directors dealings reported on corporate website The purchase or sale of adidas AG shares (ISIN DE000A1EWWW0) or related financial instruments, as defined by 15a WpHG, conducted by members of our Executive or Supervisory Boards, by key executives or by any person in close relationship with these persons, is reported on our website. In the second quarter of 2015, adidas AG did not receive any notifications pursuant to 15a WpHG. 15

16 1 Interim Group Management Report Group Business Performance / Economic and Sector Development / 02.1 / Group Business Performance In the first half of 2015, the adidas Group delivered a robust financial performance with strong momentum at both adidas and Reebok. Currency-neutral Group sales increased 7%. In euro terms, Group revenues increased 16% to billion from billion in The Group s gross margin decreased 0.4 percentage points to 48.8% (2014: 49.2%). In the first half of 2015, the adidas Group incurred goodwill impairment losses of 18 million. These one-off expenses were non-cash in nature and did not affect the adidas Group s liquidity. Excluding goodwill impairment losses, the Group s operating profit increased 14% to 596 million compared to 524 million in the first half of 2014, representing an operating margin of 7.5%, down 0.2 percentage points compared to the prior year (2014: 7.6%). The Group s net income from continuing operations excluding goodwill impairment losses was up 14% to 401 million (2014: 352 million). In the first half of 2015, the adidas Group incurred losses from discontinued operations of 13 million (2014: losses of 1 million). As a result, net income attributable to shareholders from continuing and discontinued operations excluding goodwill impairment losses was up 11% to 385 million (2014: 348 million). Basic and diluted earnings per share (EPS) from continuing and discontinued operations excluding goodwill impairment losses increased 14% to 1.90 from 1.67 in Economic and Sector Development 16 Global economy grows in the second quarter In the second quarter of 2015, the global economy strengthened moderately. Emerging markets again outperformed most developed economies, albeit at lower rates than in recent quarters. Growth in major economies was supported by modest GDP expansion in both the euro area and the USA as well as by low oil prices, increasing consumer spending and declining inflationary pressures. Nevertheless, despite improvements in economic activity, many developed markets continued to face significant challenges, such as high unemployment, indebtedness and low investment spending. In addition, a number of developing countries recorded disappointing results, driven by lower industrial and domestic production, political uncertainties and domestic policy tightening. In Western Europe, the region s economies grew at a slow pace, supported by the weak euro, declining oil prices, record low interest rates and accelerating government spending, with Spain and the UK in particular recording healthy GDP growth. Despite an improvement in consumer confidence levels, high unemployment levels in certain major markets, inhibited investment as well as ongoing public debt dynamics resulted in lacklustre GDP increases in many of these countries. The Greek financial crisis remained the highest source of uncertainty for the region, resulting in a slowdown of the region s economic recovery. Most European emerging markets except Russia recorded positive GDP growth, with relatively healthy investment, domestic demand and low inflation driving the expansion. However, the ongoing political unrest in Russia/Ukraine led to continued economic contraction in these two countries, with the crisis further depressing Russia s already slowing economy as reflected in dented investments, lower consumer spending and reduced export activity. Furthermore, sanctions against Russia and high inflationary pressures together with the continuing weakness of the rouble put additional constraints on growth.

17 Interim Group Management Report Group Business Performance / Economic and Sector Development / 02.1 / The US economy slowed in the second quarter, driven by disruptions to port activity and cutbacks in capital expenditures in the oil and gas industry. In addition, the continuing appreciation of the US dollar put further pressure on exports. The softness in export activity impacted the manufacturing sector, resulting in a slowdown of industrial production growth. At the same time, however, the domestic economy gained some momentum during the second quarter as an improving labour market and low inflationary pressures bolstered higher consumer spending and construction activity. Asia remained the fastest-growing region in the second quarter, although economic expansion slowed compared to previous quarters. In China, growth decelerated but remained at a relatively robust level, supported by stable inflation rates and the continuous introduction of accommodative monetary and industrial policy measures to tackle financial vulnerabilities. Japan s economy showed signs of recovery in the second quarter, driven by stronger domestic demand, export growth and uplifts to real disposable incomes. In addition, exports improved as a result of fiscal policies implemented by the government. India s economy expanded in the second quarter, driven by growing consumer spending and domestic demand as well as declining inflation. In Latin America, GDP development varied across countries. Argentina s economic growth was supported by falling inflation, which bolstered private consumption, as well as a better-thanexpected harvest, which stabilised output. In Brazil, however, low investment activity, weak consumer confidence, tighter credit conditions and an ongoing erosion of disposable income drove further economic contraction. Other regional economies such as Mexico, Colombia and Chile posted healthy GDP increases in the second quarter, with increasing private consumer spending, wage growth and stronger domestic demand fuelling expansion / Quarterly consumer confidence development 1) (by region) Q Q Q Q Q / Exchange rate development 1) ( 1 equals) Average rate 2014 Q Q Q Q Average rate ) USA 2) Euro area 3) (7.6) (11.5) (11.0) (3.7) (5.6) Japan 4) China 5) Russia 6) (6.0) (7.0) (18.0) (32.0) (23.0) Brazil 7) ) Quarter-end figures. 2) Source: Conference Board. 3) Source: European Commission. 4) Source: Economic and Social Research Institute, Government of Japan. 5) Source: China National Bureau of Statistics. 6) Source: Russia Federal Service of State Statistics. 7) Source: National Confederation of Industry Brazil. USD GBP JPY RUB CNY ) Spot rates at quarter-end. 2) Average rate for the first half of 2015.

18 Interim Group Management Report Group Business Performance / Economic and Sector Development / 02.1 / Positive momentum in the sporting goods industry in the second quarter In the second quarter of 2015, the global sporting goods industry grew, supported by rising consumer spending in both emerging and developed markets. The e-commerce channel continued to see rapid expansion, as retailers leveraged a wide variety of commercial opportunities across mobile technologies and social media. From a category perspective, basketball continued to enjoy strong momentum, with both performance and lifestyle developing well. Running grew at a slower pace compared to basketball, supported by growth in fashion running. The outdoor category posted some declines, as a result of weaker demand in both outdoor footwear and casual styles. In Western Europe, despite continuing high unemployment rates, sequential increases in consumer spending and private domestic demand in many markets supported the robust growth of the sector. In European emerging markets, a contraction in disposable income growth rates driven by high inflationary pressures and the continuing weakness of the rouble negatively impacted consumer sentiment and spending and detracted from the sporting goods sector s expansion, especially in Russia. In North America, the sporting goods industry grew modestly, benefiting from rising real disposable income and low inflationary pressures within the region. Basketball footwear continued to be in strong demand, fuelled by growth in both performance and lifestyle basketball, outperforming outdoor products. During the second quarter, casual athletic footwear grew, driven by stronger demand in lifestyle fashion athletic and classic styles. US sporting footwear, apparel and sports licensed sales also showcased a modest increase throughout the second quarter. Many sporting goods retailers focused on high-performance and technically innovative products to help support higher prices and to drive sales. The golf market continues to face structural changes and remained challenging, with ongoing promotional activities, despite new product launches within the quarter. 18 In Asia, rising disposable incomes and consumer spending promoted expansion of the sporting goods industry. This trend was particularly evident in China, supporting healthy industry sales growth, especially in the lower-tier cities. Sporting goods sales in Japan saw improvements as the quarter developed, fuelled by stronger consumer spending and domestic demand. In India, the size of the sector continued to expand at a strong pace. The sporting goods industry in Latin America contracted during the second quarter, due to high inflationary pressures, low consumer confidence and subdued domestic demand, offsetting lower unemployment levels and wage increases. In particular Argentina and Brazil, two markets which benefited the most in the prior year from the 2014 World Cup, were negatively impacted by these developments.

19 Interim Group Management Report Group Business Performance / Income Statement / 02.1 / Income Statement Focus on continuing operations Due to the existence of a concrete plan at the balance sheet date to sell the Rockport operating segment, all income and expenses of the Rockport operating segment are reported as discontinued operations at the end of June For the sake of clarity, all figures related to the 2014 and 2015 financial years in this report refer to the Group s continuing operations unless otherwise stated. adidas Group currency-neutral sales increase 5% in the second quarter of 2015 In the second quarter of 2015, Group revenues grew 5% on a currency-neutral basis, as a result of a high-single-digit increase at adidas as well as mid-single-digit growth at Reebok. Currency translation effects had a positive impact on sales in euro terms. Group revenues grew 15% to billion in the second quarter of 2015 from billion in Strong momentum at adidas and Reebok drives Group sales development in the second quarter In the second quarter of 2015, currency-neutral adidas revenues grew 8%. This development was driven by double-digit sales increases at adidas Originals and adidas NEO as well as mid-singledigit growth in the training category. Currency-neutral Reebok sales were up 6% versus the prior year as a result of double-digit sales increases in the training, running and studio categories as well as mid-single-digit sales growth in Classics. Revenues at TaylorMade-adidas Golf declined 26% currency-neutral, due to sales decreases in most categories, in particular metalwoods and irons. adidas Group currency-neutral sales increase 7% in the first half of 2015 In the first half of 2015, Group revenues increased 7% on a currency-neutral basis, due to doubledigit growth at adidas as well as high-single-digit increases at Reebok. Currency translation effects had a positive impact on sales in euro terms. Group revenues grew 16% to billion in the first half of 2015 from billion in see Diagram First half Group sales increase due to strong growth at adidas and Reebok In the first half of 2015, currency-neutral adidas revenues grew 10%. This development was driven by double-digit sales increases at adidas Originals and adidas NEO as well as high-single-digit growth in the training and running categories. Currency-neutral Reebok sales were up 8% versus the prior year, mainly as a result of double-digit sales increases in the training and studio categories as well as high-single-digit sales growth in running. Revenues at TaylorMade-adidas Golf decreased 17% currency-neutral, due to sales declines in most categories, in particular metalwoods and irons. 11 / net sales 1) ( in millions) 12 / net sales by segments 1) , , ,005 1) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business / 26% Western Europe 2 / 15% MEAA 3 / 15% Greater China 4 / 15% North America 5 / 11% Latin America 6 / 9% Other Businesses 7 / 5% Russia/CIS 8 / 4% Japan 1) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business.

20 Interim Group Management Report Group Business Performance / Income Statement / 02.1 / 13 / Net sales by product category 1) ( in millions) Change Change (currency-neutral) Footwear 4,049 3, % 17.7% Apparel 3,125 2, % 1.6% Hardware (3.5%) (13.1%) Total 2) 7,990 6, % 7.2% 1) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business. 2) Rounding differences may arise in totals. Group sales up in footwear and apparel In the first half of 2015, currency-neutral footwear sales grew 18%, mainly due to double-digit increases in the football category as well as at adidas Originals and adidas NEO. In addition, mid-single-digit growth in running contributed to this development. Apparel revenues grew 2% on a currency-neutral basis. This development was supported by double-digit growth in the running category, at adidas Originals and adidas NEO as well as high-single-digit growth in the training category. Currency-neutral hardware sales were down 13% compared to the prior year, as a result of strong declines at TaylorMade-adidas Golf. Currency translation effects had a positive impact on sales in euro terms. see Table 13 In the second quarter of 2015, the adidas Group introduced a number of exciting new products. An overview of major product launches is provided in the product launch table below. see Table / Major product launches in Q Product Brand F50 Primeknit 2.0 football boot (limited edition) F50 99g football boot (limited edition) X and ACE football boots Messi 15 football boot CC Cosmic Boost running shoe Spring marathon running pack adidas x Marvel Avengers training collection ClimaChill training collection Terrex Agravic outdoor apparel and footwear collection Terrex Boost outdoor shoe Originals Stan Smith shoe Originals x Rita Ora line Originals Yeezy 350 Boost adidas NEO for Selena Gomez summer collection Skyscape walking shoe UFC uniform apparel collection Daddy Long Legs putter Asymmetric Energy Boost golf shoe R-Series stick RibCor skate Ultra Tacks stick adidas adidas adidas adidas adidas adidas adidas adidas adidas adidas adidas adidas adidas adidas Reebok Reebok TaylorMade adidas Golf Reebok Hockey CCM CCM

21 Interim Group Management Report Group Business Performance / Income Statement / 02.1 / Currency-neutral sales grow in nearly all market segments In the first half of 2015, on a currency-neutral basis the combined sales of the adidas and Reebok brands grew in all market segments except Russia/CIS and Japan. Revenues in Western Europe increased 12% on a currency-neutral basis, driven by double-digit sales growth in the UK, Italy, France and Spain. Currency-neutral sales in North America increased 3%. Revenues in Greater China grew 20% on a currency-neutral basis, while currency-neutral sales in Russia/CIS declined 10%. In Latin America, revenues grew 8% on a currency-neutral basis, driven by double-digit growth in Argentina, Chile and Peru. In Japan, sales were down 1% on a currency-neutral basis due to the non-recurrence of last year s World Cup related sales. Revenues in MEAA grew 12% on a currencyneutral basis, driven by strong growth in the United Arab Emirates, South Korea and Turkey. Revenues in Other Businesses were down 8% on a currency-neutral basis. Double-digit sales increases at Reebok-CCM Hockey and in Other centrally managed businesses were more than offset by sales declines at TaylorMade-adidas Golf. With the exception of Russia/CIS, currency translation effects had a positive impact on segmental sales in euro terms. see Table / Net sales by segments 1) ( in millions) Change Change (currency-neutral) Western Europe 2,104 1, % 11.7% North America 1, % 2.8% Greater China 1, % 20.4% Russia/CIS (32.0%) (9.7%) Latin America % 7.7% Japan % (0.6%) MEAA 1, % 12.3% Other Businesses % (8.1%) Total 2) 7,990 6, % 7.2% 21 1) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business. 2) Rounding differences may arise in totals.

22 Interim Group Management Report Group Business Performance / Income Statement / 02.1 / Group sales development supported by double-digit growth in retail In the first half of 2015, retail revenues increased 11% on a currency-neutral basis, mainly as a result of double-digit sales growth at adidas. Reebok revenues increased at a low-single-digit rate. Concept stores and factory outlets were both up versus the prior year, while concession corners were below the prior year level. ecommerce grew 57% on a currency-neutral basis. Currency translation effects had a minor positive impact on retail revenues in euro terms. Sales grew 11% to billion from billion in the prior year. Currency-neutral comparable store sales increased 1% versus the prior year, due to sales growth across most markets. At June 30, 2015, the adidas Group, as part of the adidas and Reebok own-retail activities, operated 2,846 stores compared to the prior year-end level of 2,913. This represents a net decrease of 67 stores, mainly reflecting the planned store closures in Russia/CIS. Of the total number of stores, 1,582 were adidas and 422 were Reebok branded (December 31, 2014: 1,616 adidas stores, 446 Reebok stores). In addition, the adidas Group operated 842 multi-branded adidas and Reebok factory outlets (December 31, 2014: 851). During the first half of 2015, the Group opened 112 new stores, 179 stores were closed and 39 stores were remodelled. see Table / Retail number of stores development Total Concept stores Factory outlets Concession corners December 31, ,913 1, Opened Closed Opened (net) (67) (51) (9) (7) June 30, ,846 1, / Retail number of stores by store format June 30, 2015 Dec. 31, 2014 Concept stores 1,695 1,746 Factory outlets Concession corners Total 2,846 2,913 June 30, 2015 December 31, 2014

23 Interim Group Management Report Group Business Performance / Income Statement / 02.1 / Group gross margin declines 0.4 percentage points In the first half of 2015, gross profit for the adidas Group increased 15% to billion versus billion in the prior year. The gross margin of the adidas Group declined 0.4 percentage points to 48.8% (2014: 49.2%), as a more favourable pricing and channel mix at adidas and Reebok was more than offset by higher input costs, negative currency effects as well as lower product margins at TaylorMade-adidas Golf. see Diagram 18 see Diagram 19 Royalty and commission income increases Royalty and commission income for the adidas Group was up 17% to 58 million in the first half of 2015 compared to 50 million in the prior year. On a currency-neutral basis, royalty and commission income remained stable. Other operating income decreases Other operating income includes items such as gains from the disposal of fixed assets and releases of accruals and provisions as well as insurance compensation. In the first half of 2015, other operating income decreased 29% to 61 million (2014: 85 million), due to a decline in the release of other operational and non-operational provisions. Other operating expenses as a percentage of sales down 0.7 percentage points Other operating expenses, including depreciation and amortisation, consist of items such as sales working budget, marketing working budget and operating overhead costs. In the first half of 2015, other operating expenses increased 14% to billion (2014: billion), reflecting an increase in sales and marketing working budget investments as well as higher operating overhead costs. As a percentage of sales, other operating expenses decreased 0.7 percentage points to 42.8% (2014: 43.5%). Sales and marketing working budget investments amounted to billion, which represents an increase of 17% versus the prior year level (2014: 942 million). The increase was due to higher investments at both adidas and Reebok. By brand, adidas sales and marketing working budget increased 16% to 853 million in the first half of 2015 compared to 733 million in the prior year. Sales and marketing working budget for Reebok increased 34%, amounting to 139 million (2014: 104 million). As a percentage of sales, the Group s sales and marketing working budget grew 0.1 percentage points to 13.8% (2014: 13.7%). see Diagram / gross profit 1) ( in millions) 19 / gross margin 1) (in %) , , ) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business. 1) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business. 20 / other operating expenses 1) ( in millions) 21 / operating profit 1) ( in millions) , , ) ) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business. 1) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business. 2) Excluding goodwill impairment of 18 million.

24 Interim Group Management Report Group Business Performance / Income Statement / 02.1 / Number of Group employees up 5% At the end of the first half of 2015, the Group employed 54,335 people. This represents an increase of 5% versus the prior year level of 51,544. New hirings related to the Group s own-retail activities were the main driver of this development. On a full-time equivalent basis, the number of employees increased 5% to 46,766 at the end of the first half of 2015 (2014: 44,502). Goodwill impairment in an amount of 18 million As a result of the change in the composition of the Group s reportable segments and associated cash-generating units, respectively, the Group determined that goodwill impairment is required in the first half of Due to the consolidation of the groups of cash-generating units Retail SLAM (Latin America excluding Brazil) and Retail Brazil with Wholesale SLAM and Wholesale Brazil as well as Retail Russia/CIS with Wholesale Russia/CIS, the carrying amount of the respective new groups of cash-generating units Latin America and Russia/CIS was determined to be higher than the respective recoverable amount. As a result, goodwill impairment losses for the first six months ending June 30, 2015 amounted to 18 million, comprising impairment losses of 15 million within the segment Latin America and 3 million within the segment Russia/CIS. Goodwill for these groups of cash-generating units is completely impaired. The impairment losses were non-cash in nature and do not affect the adidas Group s liquidity. Operating margin excluding goodwill impairment at 7.5% Group operating profit increased 10% to 578 million in the first half of 2015 versus 524 million in The operating margin of the adidas Group decreased 0.4 percentage points to 7.2% (2014: 7.6%). Excluding the goodwill impairment losses, operating profit grew 14% to 596 million from 524 million in the first half of 2014, representing an operating margin of 7.5%, down 0.2 percentage points from the prior year level (2014: 7.6%). This development was primarily due to the decline in gross margin, which more than offset the positive effect from lower other operating expenses as a percentage of sales. see Diagram 21 see Diagram Financial income increases strongly Financial income increased to 24 million in the first half of 2015 from 12 million in the prior year, as a result of positive exchange rate effects. Financial expenses down 19% Financial expenses decreased 19% to 32 million in the first half of 2015 (2014: 40 million). This development was mainly due to the non-recurrence of negative exchange rate effects compared to the prior year period. see Diagram / operating margin 1) (in %) 23 / financial expenses 1) ( in millions) ) ) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business. 2) Excluding goodwill impairment of 18 million. 1) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business.

25 Interim Group Management Report Group Business Performance / Income Statement / 02.1 / Income before taxes excluding goodwill impairment up 18% Income before taxes (IBT) for the adidas Group increased 15% to 570 million from 496 million in IBT as a percentage of sales declined 0.1 percentage points to 7.1% in the first half of 2015 (2014: 7.2%). Excluding the goodwill impairment losses, IBT was up 18% to 588 million from 496 million in 2014 and, as a percentage of sales, increased 0.1 percentage points to 7.4% from 7.2% in the prior year. see Diagram 24 Net income from continuing operations excluding goodwill impairment increases 14% The Group s net income from continuing operations increased 9% to 383 million in the first half of 2015 from 352 million in Excluding the goodwill impairment losses, net income from continuing operations was up 14% to 401 million (2014: 352 million). The Group s tax rate increased 3.9 percentage points to 32.9% in the first half of 2015 (2014: 29.0%). Excluding the goodwill impairment losses, the effective tax rate grew 2.9 percentage points to 31.8% from 29.0% in 2014, mainly due to the non-recognition of deferred tax assets. Basic and diluted EPS from continuing operations excluding goodwill impairment up 17% Basic and diluted EPS from continuing operations increased 12% to 1.87 in the first half of 2015 (2014: 1.67). Excluding the goodwill impairment losses, basic and diluted EPS from continuing operations increased 17% to 1.96 from 1.67 in The weighted average number of shares used in the calculation was 202,897,613 (2014: 209,216,186). Losses from discontinued operations total 13 million In the first half of 2015, the Group incurred losses from discontinued operations of 13 million, net of tax, related to the Rockport operating segment (2014: losses of 1 million). Losses from discontinued operations were due to a loss recognised on the measurement to fair value less costs to sell, net of tax, in the amount of 11 million, which was mainly caused by currency movements, as well as a loss from Rockport s operating activities of 2 million / income before taxes 1) ( in millions) ) ) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business. 2) Excluding goodwill impairment of 18 million.

26 Interim Group Management Report Group Business Performance / Income Statement / 02.1 / Net income attributable to shareholders excluding goodwill impairment increases 11% The Group s net income attributable to shareholders, which in addition to net income from continuing operations includes the losses from discontinued operations, grew 5% to 367 million in the first half of 2015 from 348 million in Excluding the goodwill impairment losses, net income attributable to shareholders was up 11% to 385 million (2014: 348 million). Basic and diluted EPS from continuing and discontinued operations excluding goodwill impairment grows 14% Basic and diluted EPS from continuing and discontinued operations increased 9% to 1.81 in the first half of 2015 (2014: 1.67). Excluding the goodwill impairment losses, basic and diluted EPS from continuing and discontinued operations increased 14% to 1.90 from 1.67 in The weighted average number of shares used in the calculation was 202,897,613 (2014: 209,216,186). see Diagram 25 see Diagram / net income attributable to shareholders 1) ( in millions) 26 / diluted earnings per share 1) (in ) ) ) Includes continuing and discontinued operations. 2) Excluding goodwill impairment of 18 million ) ) Includes continuing and discontinued operations. 2) Excluding goodwill impairment of 18 million. 26

27 Interim Group Management Report Group Business Performance / Statement of Financial Position and Statement of Cash Flows / 02.1 / Statement of Financial Position and Statement of Cash Flows Planned Rockport divestiture impacts balance sheet items Consistent with year-end 2014, at June 30, 2015, all assets and liabilities of the Rockport operating segment are presented as assets and liabilities classified as held for sale. Compared to December 31, 2014, the plan to sell the operating segment became even more concrete in the first half of 2015 due to the signing of a definitive agreement to sell the Rockport operating segment on January 23, The divestiture was completed on July 31, At the end of the first half of 2015, assets of 259 million and liabilities of 51 million were allocated to the Rockport operating segment. However, a restatement of the 2014 balance sheet items is not permitted under IFRS. see Note 03, p. 56 Assets At the end of June 2015, total assets increased 7% to billion versus billion in the prior year, as a result of an increase in current as well as in non-current assets. Compared to December 31, 2014, total assets grew 3%. The share of current assets and non-current assets within total assets remained unchanged at 58% and 42%, respectively, at the end of June 2015 (2014: 58% and 42%). see Diagram 27 Total current assets increased 7% to billion at the end of June 2015 compared to billion in Cash and cash equivalents decreased 19% to 959 million at the end of June 2015 from billion in the prior year, as net cash generated from operating activities was more than offset by net cash used in investing and financing activities. Group inventories increased 1% to billion at the end of June 2015 versus billion in On a currency-neutral basis, inventories remained virtually unchanged. Inventories from continuing operations increased 5% (+3% currency-neutral), reflecting the Group s growth expectations. The Group s accounts receivable increased 10% to billion at the end of June 2015 (2014: billion). On a currency-neutral basis, receivables increased 1%. Receivables from continuing operations rose 11% (+3% currency-neutral). Other current financial assets increased to 358 million at the end of June 2015 from 148 million in This development was driven by an increase in the fair value of financial instruments. Other current assets increased 2% to 526 million at the end of June 2015 (2014: 517 million), mainly due to an increase in tax receivables other than income taxes and prepayments. see Diagram 29 see Diagram / Structure of statement of financial position 1) (in % of total assets) June 30, 2015 June 30, 2014 Assets ( in millions) 12,754 11,887 Cash and cash equivalents 7.5% 10.0% Accounts receivable 17.8% 17.4% Inventories 22.9% 24.4% Fixed assets 35.7% 36.0% Other assets 16.0% 12.2% June 30, 2015 June 30, ) For absolute figures see adidas AG Consolidated Statement of Financial Position, p. 49.

28 Interim Group Management Report Group Business Performance / Statement of Financial Position and Statement of Cash Flows / 02.1 / Total non-current assets grew 8% to billion at the end of June 2015 from billion in Fixed assets increased 6% to billion at the end of June 2015 versus billion in Fixed assets include property, plant and equipment, goodwill, trademarks and other intangible assets as well as long-term financial assets. Additions of 448 million were primarily related to our own-retail activities, investments into the Group s logistics infrastructure and IT systems, the acquisition of Luta Limited and Refuel (Brand Distribution) Limited as well as the further development of the Group s headquarters in Herzogenaurach. Currency translation effects of 508 million also contributed to the increase in fixed assets. Additions were partly offset by depreciation and amortisation of 346 million, goodwill impairment of 96 million, disposals of 24 million as well as the reclassification of the net book value of Rockport fixed assets to assets classified as held for sale of 224 million. Compared to December 31, 2014, fixed assets increased by 5%. Other non-current financial assets grew 40% to 35 million at the end of June 2015 from 25 million at the end of the first half of This development was driven by an increase in embedded derivatives as well as in security deposits. Liabilities and equity Total current liabilities decreased 2% to billion at the end of June 2015 from billion in Accounts payable decreased 2% to billion at the end of June 2015 versus billion in On a currency-neutral basis, accounts payable decreased by 4%. Accounts payable from continuing operations decreased 1% and, on a currency-neutral basis, were down 3%. At the end of June 2015, other current financial liabilities increased 31% to 147 million from 112 million in 2014, primarily as a result of the increase in the negative fair value of financial instruments. Short-term borrowings declined 53% to 462 million at the end of June 2015 (2014: 990 million). This development was mainly due to the repayment of the Group s Eurobond, which matured in July Other current provisions were up 4% to 428 million at the end of June 2015 versus 412 million in This primarily relates to currency translation effects of 26 million. Current accrued liabilities grew 28% to billion at the end of June 2015 from billion in 2014, mainly due to an increase in accruals for customer discounts and personnel. Currency translation effects of 100 million also contributed to the increase in current accrued liabilities. Other current liabilities increased 5% to 311 million at the end of June 2015 from 297 million in 2014, mainly due to an increase in tax liabilities other than income taxes. see Diagram 28 see Diagram / Structure of statement of financial position 1) (in % of total liabilities and equity) June 30, 2015 June 30, 2014 Liabilities and equity ( in millions) 12,754 11,887 Short-term borrowings 3.6% 8.3% Accounts payable 13.4% 14.7% Long-term borrowings 11.4% 5.6% Other liabilities 28.1% 25.1% Total equity 43.4% 46.3% June 30, 2015 June 30, ) For absolute figures see adidas AG Consolidated Statement of Financial Position, p. 50.

29 Interim Group Management Report Group Business Performance / Statement of Financial Position and Statement of Cash Flows / 02.1 / Total non-current liabilities increased 66% to billion at the end of June 2015 from billion in the prior year. Long-term borrowings grew to billion at the end of June 2015 from 660 million in the prior year. This development was primarily due to the issuance of two Eurobonds during the fourth quarter of 2014 with an overall volume of 1 billion. Other non-current provisions grew to 39 million at the end of June 2015 versus 17 million in This primarily relates to an increase in other operational provisions. Currency translation effects of 6 million also contributed to the increase in other non-current provisions. Non-current accrued liabilities grew 58% to 92 million at the end of June 2015 from 58 million in 2014, mainly due to an increase in accruals for personnel. Shareholders equity increased 1% to billion at the end of June 2015 versus billion in The net income generated during the last twelve months, positive currency translation effects of 430 million as well as an increase in hedging reserves of 60 million were the main contributors to this development. This was partly offset by the dividend of 303 million paid to shareholders for the 2014 financial year as well as the repurchase of treasury shares in an amount of 601 million. The Group s equity ratio at the end of June 2015 decreased to 43.5% compared to 46.4% in the prior year. see Diagram 32 Operating working capital Operating working capital increased 8% to billion at the end of June 2015 compared to billion in Operating working capital from continuing operations increased 12% (+6% currency-neutral), driven by an increase in inventories and accounts receivable, reflecting the Group s growth expectations. Average operating working capital as a percentage of sales from continuing operations decreased 0.4 percentage points to 21.6% (2014: 22.0%) / Inventories 1) ( in millions) 30 / Accounts receivable 1) ( in millions) , , , ,070 1) At June 30. 1) At June / Accounts payable 1) ( in millions) 32 / Shareholders equity 1) ( in millions) , , , ,513 1) At June 30. 1) At June 30, excluding non-controlling interests.

30 Interim Group Management Report Group Business Performance / Statement of Financial Position and Statement of Cash Flows / 02.1 / Liquidity analysis In the first half of 2015, net cash used in operating activities decreased to 31 million (2014: 151 million). Net cash used in continuing operating activities declined to 48 million (2014: 147 million), primarily as a result of an increase in income before taxes, partly offset by an increase in income taxes paid. Net cash used in investing activities decreased to 145 million (2014: 233 million). Net cash used in continuing investing activities declined to 141 million (2014: 231 million), mainly as a result of lower purchases of property, plant and equipment, partly offset by the non-recurrence of proceeds from the sale of short-term financial assets. The majority of investing activities in the first half of 2015 related to spending for property, plant and equipment, such as investments in the furnishing and fitting of our own-retail stores as well as investments in the Group s logistics infrastructure and IT systems. Net cash used in financing activities totalled 588 million (2014: 10 million), mainly related to the dividend paid to shareholders of 303 million as well as the repurchase of treasury shares in the amount of 301 million. Exchange rate effects positively impacted the Group s cash position by 41 million in the first half of 2015 (2014: negative impact of 2 million). As a result of all these developments, cash and cash equivalents decreased by 724 million to 959 million at the end of June 2015 compared to billion at the end of December Net borrowings at June 30, 2015 amounted to 957 million, compared to net borrowings of 454 million in 2014, representing an increase of 502 million. This development is mainly a result of the utilisation of cash for the share buyback programme in an amount of 601 million. Currency translation had a positive effect of 15 million on net borrowings. The Group s ratio of net borrowings over EBITDA amounted to 0.6 at the end of June 2015 (2014: 0.4). see Diagram / Net borrowings 1) ( in millions) ) At June 30.

31 2 Interim Group Management Report Business Performance by Segment / Western Europe / 02.2 / Business Performance by Segment The adidas Group has divided its operating activities into the following operating segments: Western Europe, North America, Greater China, Russia/CIS, Latin America, Japan, Middle East, South Korea, Southeast Asia/Pacific, TaylorMade-adidas Golf, Reebok-CCM Hockey and Other centrally managed businesses. While the business segments Western Europe, North America, Greater China, Russia/CIS, Latin America and Japan are reported separately, the markets Middle East, South Korea and Southeast Asia/Pacific are combined to the segment MEAA ( Middle East, Africa and other Asian markets ). Each market comprises all business activities in the wholesale, retail and e-commerce distribution channels of the adidas and Reebok brands. The segmental results of TaylorMade-adidas Golf, Reebok-CCM Hockey and Other centrally managed businesses, which comprises brands such as Y-3 and Five Ten, are aggregated under Other Businesses. Segmental operating expenses primarily relate to sales and marketing working budget investments as well as expenditure for sales force, administration and logistics. Western Europe 31 Western Europe second quarter sales development In the second quarter of 2015, sales in Western Europe increased 12% on a currency-neutral basis, mainly due to double-digit sales growth at adidas. Sales at Reebok were up at a high-single-digit rate. From a market perspective, the main contributors to the increase were the UK, France, Italy and Spain, where revenues grew at double-digit rates each. Currency translation effects positively impacted revenues in euro terms. Sales in Western Europe grew 15% to 961 million in the second quarter of 2015 from 837 million in Western Europe first half results In the first half of 2015, sales in Western Europe increased 12% on a currency-neutral basis, due to double-digit sales growth at both adidas and Reebok. From a market perspective, the main contributors to the increase were the UK, Italy, France and Spain, where revenues grew at doubledigit rates each. Currency translation effects positively impacted revenues in euro terms. Sales in Western Europe grew 14% to billion from billion in the first half of see Table / Western Europe at a glance ( in millions) Change Net sales 2,104 1, % Gross profit 1, % Gross margin 47.7% 46.0% 1.7pp Segmental operating profit % Segmental operating margin 21.9% 19.1% 2.8pp

32 Interim Group Management Report Business Performance by Segment / Western Europe / 02.2 / Gross margin in Western Europe increased 1.7 percentage points to 47.7 % in the first half of 2015 from 46.0 % in This development was driven by positive currency effects and a better channel mix, partly offset by higher input costs as well as a less favourable product mix. Gross profit in Western Europe increased 18% to billion versus 851 million in see Table 34 Operating expenses were up 9% to 544 million versus 499 million in the first half of This development reflects an increase in sales and marketing working budget investments as well as higher sales expenditure. Operating expenses as a percentage of sales decreased 1.1 percentage points to 25.8% (2014: 27.0%). Operating margin improved 2.8 percentage points to 21.9% (2014: 19.1%), as a result of the gross margin increase as well as the positive effect of lower operating expenses as a percentage of sales. Operating profit in Western Europe increased 31% to 460 million versus 352 million in the prior year. see Table 34 Western Europe development by brand adidas revenues in Western Europe grew 12% on a currency-neutral basis in the first half of This development was driven by double-digit sales growth at adidas Originals and adidas NEO as well as strong increases in the running and outdoor categories. Currency translation effects had a positive impact on revenues in euro terms. adidas sales in Western Europe increased 14% to billion (2014: billion). Reebok revenues in Western Europe increased 13% on a currency-neutral basis in the first half of This development was mainly due to double-digit sales growth in the training, running and studio categories as well as a high-single-digit increase in Classics. Currency translation effects had a positive impact on revenues in euro terms. Reebok sales in Western Europe were up 15% to 173 million from 150 million in the prior year. 32

33 Interim Group Management Report Business Performance by Segment / North America / 02.2 / North America North America second quarter sales development In the second quarter of 2015, sales in North America remained stable on a currency-neutral basis, as growth at adidas was offset by sales declines at Reebok. Currency translation effects positively impacted revenues in euro terms. Sales in North America grew 22% to 643 million from 528 million in the second quarter of North America first half results In the first half of 2015, sales in North America increased 3% on a currency-neutral basis, as a result of mid-single-digit sales growth at adidas. Currency translation effects positively impacted revenues in euro terms. Sales in North America grew 25% to billion from 990 million in the first half of see Table 35 Gross margin in North America decreased 0.2 percentage points to 36.6% in the first half of 2015 from 36.8% in The positive effect from a significantly better pricing mix was offset by higher input costs, a less favourable product mix as well as negative currency effects. Gross profit in North America increased 24% to 451 million versus 364 million in see Table 35 Operating expenses were up 36% to 462 million versus 340 million in the first half of This was primarily due to significantly higher marketing working budget investments as well as higher sales expenditure. As a result, operating expenses as a percentage of sales increased 3.1 percentage points to 37.5% (2014: 34.4%). 33 Operating margin decreased 3.6 percentage points to 0.6% (2014: 4.2%), due to the negative effect of higher operating expenses as a percentage of sales as well as the gross margin decline. Operating profit in North America decreased 81% to 8 million (2014: 42 million). see Table 35 North America development by brand adidas revenues in North America grew 5% on a currency-neutral basis in the first half of 2015, driven by strong sales growth at adidas Originals and adidas NEO. Currency translation effects had a positive impact on revenues in euro terms. adidas sales in North America increased 28% to 990 million (2014: 776 million). Reebok revenues in North America decreased 6% on a currency-neutral basis in the first half of 2015, as double-digit sales growth in the training and studio categories was more than offset by declines in the walking category as well as in Classics. The development also reflects the brand s continued efforts to further streamline Reebok s factory outlet business in North America. Currency translation effects had a positive impact on revenues in euro terms. Reebok sales in North America were up 14% to 243 million from 213 million in the prior year. 35 / North America at a glance ( in millions) Change Net sales 1, % Gross profit % Gross margin 36.6% 36.8% (0.2pp) Segmental operating profit 8 42 (80.9%) Segmental operating margin 0.6% 4.2% (3.6pp)

34 Interim Group Management Report Business Performance by Segment / Greater China / 02.2 / Greater China Greater China second quarter sales development In the second quarter of 2015, sales in Greater China increased 19% on a currency-neutral basis, as a result of double-digit sales growth at both adidas and Reebok. Currency translation effects positively impacted revenues in euro terms. Sales in Greater China grew 48% to 564 million from 380 million in the second quarter of Greater China first half results In the first half of 2015, sales in Greater China increased 20% on a currency-neutral basis, as a result of double-digit sales growth at both adidas and Reebok. Currency translation effects positively impacted revenues in euro terms. Sales in Greater China grew 46% to billion from 794 million in the first half of see Table 36 Gross margin in Greater China decreased 1.4 percentage points to 57.4% in the first half of 2015 from 58.7% in The positive effects from a better pricing and channel mix were more than offset by higher input costs and a less favourable product mix. Gross profit in Greater China increased 43% to 666 million versus 466 million in see Table 36 Operating expenses were up 32% to 242 million versus 184 million in the first half of This was primarily due to an increase in sales working budget investments. Operating expenses as a percentage of sales decreased 2.3 percentage points to 20.9% (2014: 23.1%). Operating margin increased 0.9 percentage points to 36.5% (2014: 35.6%), as the positive effect from lower operating expenses as a percentage of sales more than offset the decrease in gross margin. Operating profit in Greater China increased 50% to 424 million versus 282 million in the prior year. see Table Greater China development by brand adidas revenues in Greater China grew 20% on a currency-neutral basis in the first half of The increase was mainly due to double-digit sales growth in the training and running categories as well as at adidas Originals and adidas NEO. Currency translation effects had a positive impact on revenues in euro terms. adidas sales in Greater China increased 45% to billion (2014: 781 million). Reebok revenues in Greater China increased 58% on a currency-neutral basis in the first half of 2015, driven by a significant sales increase in Classics, where revenues more than doubled. Currency translation effects had a positive impact on revenues in euro terms. Reebok sales in Greater China were up 92% to 25 million from 13 million in the prior year. 36 / Greater China at a glance ( in millions) Change Net sales 1, % Gross profit % Gross margin 57.4% 58.7% (1.4pp) Segmental operating profit % Segmental operating margin 36.5% 35.6% 0.9pp

35 Interim Group Management Report Business Performance by Segment / Russia/CIS / 02.2 / Russia/CIS Russia/CIS second quarter sales development In the second quarter of 2015, sales in Russia/CIS decreased 14% on a currency-neutral basis, as a result of sales declines at both adidas and Reebok. Currency translation effects negatively impacted revenues in euro terms. Revenues in Russia/CIS declined 31% to 204 million from 294 million in the second quarter of Russia/CIS first half results In the first half of 2015, sales in Russia/CIS decreased 10% on a currency-neutral basis, due to sales declines at both adidas and Reebok. Currency translation effects negatively impacted revenues in euro terms. Revenues in Russia/CIS declined 32% to 366 million from 539 million in the first half of see Table 37 Gross margin in Russia/CIS decreased 5.0 percentage points to 56.0% in the first half of 2015 from 61.0% in The positive impact from a significantly more favourable pricing mix was more than offset by negative currency effects as well as higher input costs. Gross profit in Russia/CIS decreased 38% to 205 million versus 329 million in see Table 37 Operating expenses were down 31% to 172 million versus 250 million in the first half of This was primarily due to lower sales expenditure, reflecting the reduction in the number of stores. Operating expenses as a percentage of sales increased 0.6 percentage points to 47.0% (2014: 46.4%). Operating margin decreased 5.6 percentage points to 9.0% (2014: 14.6%), due to the gross margin decline as well as the negative effect of higher operating expenses as a percentage of sales. Operating profit in Russia/CIS decreased 58% to 33 million versus 79 million in the prior year. see Table Russia/CIS development by brand adidas revenues decreased 12% on a currency-neutral basis in Russia/CIS in the first half of This development was due to sales declines in most categories. Currency translation effects had a negative impact on revenues in euro terms. adidas sales in Russia/CIS declined 34% to 284 million (2014: 428 million). Reebok revenues in Russia/CIS decreased 2% on a currency-neutral basis in the first half of 2015, as growth in the training and studio categories was more than offset by sales declines in the running and walking categories as well as in Classics. Currency translation effects had a negative impact on revenues in euro terms. Reebok sales in Russia/CIS were down 26% to 82 million from 110 million in the prior year. 37 / Russia/CIS at a glance ( in millions) Change Net sales (32.0%) Gross profit (37.6%) Gross margin 56.0% 61.0% (5.0pp) Segmental operating profit (58.1%) Segmental operating margin 9.0% 14.6% (5.6pp)

36 Interim Group Management Report Business Performance by Segment / Latin America / 02.2 / Latin America Latin America second quarter sales development In the second quarter of 2015, sales in Latin America increased 9% on a currency-neutral basis, as a result of high-single-digit sales growth at adidas and double-digit revenue increases at Reebok. From a market perspective, the top-line development was driven by double-digit sales growth in Argentina, Chile and Peru. Currency translation effects positively impacted revenues in euro terms. Sales in Latin America grew 14% to 456 million from 400 million in the second quarter of Latin America first half results In the first half of 2015, sales in Latin America increased 8% on a currency-neutral basis, as a result of mid-single-digit sales growth at adidas and double-digit revenue increases at Reebok. From a market perspective, the top-line development was driven by double-digit sales growth in Argentina, Chile and Peru. Currency translation effects positively impacted revenues in euro terms. Sales in Latin America grew 14% to 879 million from 774 million in the first half of see Table 38 Gross margin in Latin America increased 2.5 percentage points to 42.5% in the first half of 2015 from 40.0% in This development was driven by a more favourable pricing and channel mix, partly offset by negative currency effects as well as higher input costs. Gross profit in Latin America increased 20% to 374 million versus 310 million in see Table 38 Operating expenses were up 23% to 247 million versus 201 million in the first half of This was primarily due to higher sales expenditure as well as higher marketing working budget investments. Operating expenses as a percentage of sales increased 2.1 percentage points to 28.1% (2014: 26.0%). 36 Operating margin improved 0.4 percentage points to 14.4% (2014: 14.0%). This development was a result of the gross margin improvement, which more than offset the increase in operating expenses as a percentage of sales. Operating profit in Latin America increased 16% to 127 million versus 109 million in the prior year. see Table / Latin America at a glance ( in millions) Change Net sales % Gross profit % Gross margin 42.5% 40.0% 2.5pp Segmental operating profit % Segmental operating margin 14.4% 14.0% 0.4pp

37 Interim Group Management Report Business Performance by Segment / Japan / 02.2 / Latin America development by brand adidas revenues grew 6% on a currency-neutral basis in Latin America in the first half of This development was supported by double-digit sales increases in the training and running categories as well as at adidas Originals and adidas NEO. Currency translation effects had a positive impact on revenues in euro terms. adidas sales in Latin America increased 11% to 749 million (2014: 673 million). Reebok revenues in Latin America increased 19% on a currency-neutral basis in the first half of 2015, driven by double-digit sales growth in the running and training categories as well as in Classics. Currency translation effects had a positive impact on revenues in euro terms. Reebok sales in Latin America were up 29% to 130 million from 101 million in the prior year. Japan Japan second quarter sales development In the second quarter of 2015, sales in Japan decreased 6% on a currency-neutral basis, as doubledigit growth at Reebok was more than offset by sales declines at adidas. Currency translation effects positively impacted revenues in euro terms. Sales in Japan declined 2% to 178 million from 181 million in the second quarter of Japan first half results In the first half of 2015, sales in Japan decreased 1% on a currency-neutral basis, as double-digit sales growth at Reebok was more than offset by sales declines at adidas. Currency translation effects positively impacted revenues in euro terms. Sales in Japan grew 4% to 333 million from 320 million in the first half of see Table Gross margin in Japan increased 3.1 percentage points to 47.8% in the first half of 2015 from 44.7% in The increase was driven by a more favourable pricing, product and channel mix, partly offset by negative currency effects and higher input costs. Gross profit in Japan increased 11% to 159 million versus 143 million in see Table 39 Operating expenses were up 7% to 112 million versus 104 million in the first half of 2014, mainly as a result of higher sales expenditure. Operating expenses as a percentage of sales increased 1.0 percentage points to 33.6% (2014: 32.6%). 39 / Japan at a glance ( in millions) Change Net sales % Gross profit % Gross margin 47.8% 44.7% 3.1pp Segmental operating profit % Segmental operating margin 16.1% 14.4% 1.7pp

38 Interim Group Management Report Business Performance by Segment / MEAA (Middle East, Africa and other Asian markets) / 02.2 / Operating margin improved 1.7 percentage points to 16.1% (2014: 14.4%) as the gross margin increase more than offset the negative effect of higher operating expenses as a percentage of sales. Operating profit in Japan increased 16% to 54 million versus 46 million in the prior year. see Table 39 Japan development by brand adidas revenues decreased 3% on a currency-neutral basis in Japan in the first half of Doubledigit increases at adidas Originals and in the running category were more than offset by declines in the training and football categories, the latter being mainly due to the non-recurrence of last year s World Cup related sales. Currency translation effects had a positive impact on revenues in euro terms. adidas sales in Japan increased 1% to 306 million (2014: 303 million). Reebok revenues in Japan increased 46% on a currency-neutral basis in the first half of 2015, driven by double-digit sales growth in Classics as well as in the running and training categories. Currency translation effects had a positive impact on revenues in euro terms. Reebok sales in Japan were up 53% to 27 million from 18 million in the prior year. MEAA (Middle East, Africa and other Asian markets) MEAA second quarter sales development In the second quarter of 2015, sales in MEAA increased 16% on a currency-neutral basis, due to double-digit sales growth at both adidas and Reebok. From a market perspective, the main contributors to the increase were the United Arab Emirates, South Korea and Turkey. Currency translation effects positively impacted revenues in euro terms. Sales in MEAA grew 31% to 536 million from 409 million in the second quarter of MEAA first half results In the first half of 2015, sales in MEAA increased 12% on a currency-neutral basis, as a result of double-digit sales growth at both adidas and Reebok. From a market perspective, the main contributors to the increase were the United Arab Emirates, South Korea and Turkey. Currency translation effects positively impacted revenues in euro terms. Sales in MEAA grew 28% to billion from 912 million in the first half of see Table 40 Gross margin in MEAA decreased 1.1 percentage points to 51.7% in the first half of 2015 from 52.7% in The positive impact from a more favourable pricing mix was more than offset by higher input costs as well as negative currency effects. Gross profit in MEAA increased 26% to 605 million versus 481 million in see Table / MEAA at a glance ( in millions) Change Net sales 1, % Gross profit % Gross margin 51.7% 52.7% (1.1pp) Segmental operating profit % Segmental operating margin 29.0% 29.7% (0.7pp)

39 Interim Group Management Report Business Performance by Segment / Other Businesses / 02.2 / Operating expenses were up 26% to 266 million versus 211 million in the first half of This was primarily due to higher sales expenditure as well as an increase in sales and marketing working budget investments. Operating expenses as a percentage of sales decreased 0.4 percentage points to 22.7% (2014: 23.1%). Operating margin decreased 0.7 percentage points to 29.0% (2014: 29.7%), as lower operating expenses as a percentage of sales were more than offset by the gross margin decline. Operating profit in MEAA increased 25% to 340 million versus 271 million in the prior year. see Table 40 MEAA development by brand adidas revenues in MEAA grew 12% on a currency-neutral basis in the first half of This development was mainly due to double-digit sales increases in the training and running categories as well as at adidas Originals. Currency translation effects had a positive impact on revenues in euro terms. adidas sales in MEAA increased 28% to billion (2014: 808 million). Reebok revenues in MEAA increased 13% on a currency-neutral basis in the first half of 2015, mainly as a result of double-digit growth in the training, walking and studio categories as well as high-single-digit improvements in running. Currency translation effects had a positive impact on revenues in euro terms. Reebok sales in MEAA were up 31% to 136 million from 104 million in the prior year. Other Businesses 39 Other Businesses second quarter results In the second quarter of 2015, revenues of Other Businesses were down 14% on a currency-neutral basis. This was due to double-digit sales decreases at TaylorMade-adidas Golf, which more than offset double-digit sales increases at Reebok-CCM Hockey as well as in Other centrally managed businesses. Currency translation effects positively impacted revenues in euro terms. Sales of Other Businesses decreased 1% to 365 million (2014: 369 million). Other Businesses first half results In the first half of 2015, revenues of Other Businesses were down 8% on a currency-neutral basis, due to double-digit sales decreases at TaylorMade-adidas Golf. Sales at Reebok-CCM Hockey as well as in Other centrally managed businesses both increased at a double-digit rate. Currency translation effects positively impacted revenues in euro terms. Sales of Other Businesses increased 6% to 742 million (2014: 702 million). see Table / Other Businesses at a glance 1) ( in millions) Change Net sales % TaylorMade-adidas Golf (3.1%) Reebok-CCM Hockey % Other centrally managed businesses % Gross profit (3.3%) Gross margin 34.2% 37.4% (3.2pp) Segmental operating profit (45) (19) (141.6%) Segmental operating margin (6.1%) (2.7%) (3.4pp) 1) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business.

40 Interim Group Management Report Business Performance by Segment / Other Businesses / 02.2 / Gross margin in Other Businesses decreased 3.2 percentage points to 34.2% (2014: 37.4%), mainly due to lower product margins at TaylorMade-adidas Golf. Gross profit was down 3% to 254 million in the first half of 2015 versus 263 million in see Table 41 Operating expenses increased 6% to 303 million from 285 million in 2014, as lower sales expenditure at TaylorMade-adidas Golf was more than offset by higher logistic costs at Reebok-CCM Hockey. Operating expenses as a percentage of sales increased 0.2 percentage points to 40.9% (2014: 40.6%). In the first half of 2015, Other Businesses recorded an operating loss of 45 million (2014: operating loss of 19 million). This resulted in a negative operating margin of 6.1% compared to a negative operating margin of 2.7% in The main reason for this development was the gross margin decline. see Table 41 Other Businesses development by segment TaylorMade-adidas Golf revenues declined 17% on a currency-neutral basis in the first half of This development was due to sales decreases in most categories, in particular metalwoods and irons. Currency translation effects positively impacted TaylorMade-adidas Golf sales in euro terms. Revenues decreased 3% to 519 million from 535 million in the prior year. see Table 41 Currency-neutral Reebok-CCM Hockey sales were up 14%. This increase was mainly due to doubledigit growth in key categories such as skates, sticks and protective equipment. In addition, doubledigit increases in apparel contributed to this development. Currency translation effects positively impacted sales in euro terms. Reebok-CCM Hockey revenues increased 28% to 120 million in the first half of 2015 from 93 million in see Table Other centrally managed businesses revenues increased 37% on a currency-neutral basis, as a result of strong double-digit sales growth at all sub-brands. Currency translation effects had a positive impact on sales in euro terms. Revenues in Other centrally managed businesses increased 41% to 104 million in the first half of 2015 (2014: 74 million). see Table 41

41 3 Interim Group Management Report Subsequent Events and Outlook / Subsequent Events / Outlook / 02.3 / Subsequent Events and Outlook In 2015, despite a high degree of economic uncertainty in Russia/CIS and the Middle East, we expect global economic growth to increase. This will be supported by a more favourable labour market development as well as low financing and energy costs, which are forecasted to positively impact consumer spending, providing a positive backdrop for the continued growth and expansion of the sporting goods industry. Through our extensive pipeline of new and innovative products and the positive effects from increased brand-building activities, tight control of inventory levels and strict cost management, we project topand bottom-line improvements in our Group s financial results in We forecast adidas Group sales to increase at a mid-single-digit rate on a currency-neutral basis, driven by the ongoing robust momentum at both adidas and Reebok. Given the strengthening of major currencies versus the euro, most notably the US dollar and the Chinese renminbi, currency translation is expected to have a positive impact on our top-line development in reported terms. Group gross margin is expected to be significantly impacted by adverse currency movements and is forecasted to be at a level between 47.5% and 48.5%. Group operating margin excluding goodwill impairment is expected to be at a level between 6.5% and 7.0%. As a result, we project net income from continuing operations excluding goodwill impairment to increase at a rate of 7% to 10%. 41 Subsequent Events adidas Group completes divestiture of Rockport operating segment The sale of the Rockport operating segment was successfully completed on July 31, 2015 with the fulfilment of the closing conditions which were aligned in the agreement signed at the beginning of No other subsequent events Since the end of the first half of 2015, there have been no other significant organisational, management, economic, socio-political, legal or financial changes which we expect to influence our business materially going forward. Outlook Forward-looking statements This Management Report contains forward-looking statements that reflect Management s current view with respect to the future development of the adidas Group. The outlook is based on estimates that we have made on the basis of all the information available to us at this point in time. In addition, such forward-looking statements are subject to uncertainties as described in the Risk and Opportunity Report of the adidas Group 2014 Annual Report (pp ), which are beyond the control of the adidas Group. In case the underlying assumptions turn out to be incorrect or described risks or opportunities materialise, actual results and developments may materially deviate (negatively or positively) from those expressed by such statements. The adidas Group does not assume any obligation to update any forward-looking statements made in this Management Report beyond statutory disclosure obligations.

42 Interim Group Management Report Subsequent Events and Outlook / Outlook / 02.3 / Global economy to grow in ) Global GDP growth is projected to increase moderately by 2.8% in Growth is forecasted to be stronger in 2015 relative to 2014 in developed economies, but weaker in emerging markets, reflecting more subdued prospects for large emerging market economies and oil exporters. At 2.0%, developed economies are expected to grow slightly faster than last year, supported by improving labour markets, growing consumer spending, low inflation rates and lower oil prices. At 4.4%, growth in developing countries should benefit from the accelerated recovery in high-income markets, the continued support from accommodative monetary policy stances as well as lower inflationary pressures. In addition, strong public investment is expected to largely offset the negative impact from lower commodity prices. Oil prices are forecasted to remain low, encouraging global growth and resulting in a divergent outlook for oil-exporting and oil-importing countries. 1) Sources: World Bank, HSBC Global Research. In Western Europe, external demand is expected to improve slightly. Private investment is forecasted to gradually pick up and consumer spending is projected to remain resilient as a result of stronger real wages from declining oil prices. In addition, accommodative monetary policies are predicted to lead to a further depreciation of the euro, supporting economic activity and gradually lifting inflation from previous low levels. As a result, the region s GDP is expected to expand at a rate of 1.5%. In Germany, the economy is projected to grow 1.5%, with private consumer demand and improving labour markets prevailing as the major drivers of growth, which is however forecasted to be held back by subdued investment spending. In the short term, ongoing uncertainty resulting from developments in Greece is expected to have a negative impact on demand, acting as a major drag to investment activity. European emerging markets are expected to grow at a moderate pace of 1.3% in 2015, as persistent political tensions and uncertainty will slow down investment spending, while further currency movements, high inflationary pressures and low real wages will impact private household demand and import volumes. Russia s economy will be particularly affected and, as a result, is forecasted to contract 3.5% this year. 42 In the USA, consumer spending is projected to remain the major source of growth, supported by declining unemployment rates. Despite low inflationary pressures, the strong US dollar will continue to weigh on exports, tempering the overall advance in GDP in the second half of the year. As a result, the US economy is forecasted to grow at around 2.7% in Asia s GDP is projected to increase 4.3% in With the exception of Japan, growth is expected to remain relatively high during the year, supported by healthy industrial activity, declining inflationary pressures and significant wage increases, which are bolstering consumer spending. China s GDP is forecasted to expand by 7.1% in 2015, fuelled by accommodative fiscal policies, rising consumer spending and significant wage growth. While Japan is predicted to continue to grow at subdued levels, supported by robust export growth, low inflationary pressures and accommodative monetary policies, India is expected to drive growth through strong private domestic demand, strengthened investment and growing consumer spending. In Latin America, GDP growth is expected to increase 0.7% in Positive performance in several countries is forecasted to offset the slow recovery of the largest economies, e.g. Brazil and Argentina, where currency fluctuations, high inflationary pressures and the weakness in the job market with its negative implications for household consumption is expected to slow down the region s overall economic activity.

43 Interim Group Management Report Subsequent Events and Outlook / Outlook / 02.3 / Sporting goods industry expansion to continue in 2015 In the absence of any major economic shocks, we expect the global sporting goods industry to grow at a low- to mid-single-digit rate in 2015, in spite of the non-recurrence of major sporting events that took place in 2014, such as the FIFA World Cup in Brazil and the Winter Olympic Games in Russia. Consumer spending on sporting goods in the emerging economies is expected to grow faster than in the more developed markets. Many sporting goods retailers will continue to move to a more omni-channel business model, and e-commerce and investment in digital will remain growth areas. In Western Europe, the expected growth of consumer confidence and real wages should positively impact domestic demand in the sporting goods industry. In the European emerging markets, the projected decline in real wages from low oil prices and the geopolitical tensions in Russia and Ukraine provide additional potential risk of depressing sentiment and economic activity, which might negatively impact private consumption and growth in the sporting goods industry. In the USA, industry growth rates are expected to be ahead of the economy s overall growth. E-commerce channels are forecasted to remain strong. The trend towards high-performance technical footwear and apparel looks set to continue. Retro silhouettes are projected to remain strong across a variety of categories, including basketball and tennis. The US golf market is expected to face continuing structural challenges. In Greater China, strong wage growth and domestic consumption are predicted to propel sporting goods sales in The trend and market share shift towards international brands is expected to continue. In Japan, the government s stimulus programmes are forecasted to drive modest improvements in consumer sentiment and spending, despite subdued real wages. Most of the other Asian markets are projected to see robust sporting goods sales growth in In Latin America, after a year of healthy growth owing to the sales momentum gained from the 2014 FIFA World Cup in Brazil, headwinds from high inflation, weakness in the labour market and adverse currency fluctuations are expected to have negative implications for household consumption in the region s largest economies, e.g. Brazil and Argentina, also slowing down growth in the sporting goods industry. adidas Group currency-neutral sales expected to increase at a mid-single-digit rate in 2015 We expect adidas Group sales to increase at a mid-single-digit rate on a currency-neutral basis in Despite the continued high degree of uncertainty regarding the economic outlook and consumer spending in Russia/CIS, the positive sales development will be supported by rising consumer confidence in most geographical areas. Group sales development will be driven by the ongoing robust momentum at both adidas and Reebok. This, as well as the further expansion and improvement of our controlled space initiatives, will more than offset the non-recurrence of sales related to the 2014 FIFA World Cup as well as the expected sales decline at TaylorMade-adidas Golf. Currency translation is expected to positively impact our top-line development in reported terms, given the strengthening of major currencies such as the US dollar and the Chinese renminbi versus the euro.

44 Interim Group Management Report Subsequent Events and Outlook / Outlook / 02.3 / Currency-neutral combined sales of adidas and Reebok expected to increase in nearly all market segments In 2015, we expect currency-neutral combined revenues of adidas and Reebok to increase in all our market segments except Russia/CIS. In Western Europe, despite the non-recurrence of the 2014 FIFA World Cup, which provided a positive stimulus in the region during the year, gradual macroeconomic improvements, the build-up to the UEFA EURO 2016 and, in particular, the strong brand momentum at adidas and Reebok will positively impact sales development. As a result, we forecast currency-neutral sales in Western Europe to grow at a double-digit rate (previously: mid-single-digit rate), with both adidas and Reebok contributing to the strong sales increase. In North America, currency-neutral sales are projected to grow at a low- to mid-single-digit rate. We expect robust top-line improvements at adidas, as the brand will strengthen its visibility in the marketplace by stepping up marketing investments as well as improving the overall product offering in key categories. Currency-neutral Reebok sales are projected to be below the prior year level as a result of Reebok s continued efforts to further streamline the brand s factory outlet business in this market. In Greater China, currency-neutral sales are forecasted to increase at a double-digit rate (previously: high-single-digit rate), with both adidas and Reebok projected to contribute to the increase. This development will be supported by further expanding and solidifying our distribution footprint in the market. In Russia/CIS, depressed consumer confidence and consumer spending will weigh on the overall sales development in this market segment and the adidas brand in particular. In addition, sales performance will be negatively impacted by a reduction of the store base in this market segment. As a result, currency-neutral sales in Russia/CIS are expected to decline. In Latin America, the robust positioning of the adidas and Reebok brands is expected to more than compensate for the non-recurrence of the positive impetus from sales associated with the 2014 FIFA World Cup. As a result, we project currency-neutral sales in Latin America to increase at a mid-single-digit rate (previously: low- to mid-single-digit rate), with both adidas and Reebok contributing to this development. In Japan, last year s increase in the consumption tax rate is expected to dampen growth prospects in the region. Consequently, currency-neutral sales are forecasted to grow at a low-single-digit rate. Lastly, in MEAA we expect currency-neutral sales to grow at a double-digit rate (previously: high-single-digit rate), driven by markets such as South Korea, the United Arab Emirates and Turkey, where both adidas and Reebok enjoy strong momentum. 44 Currency-neutral sales of Other Businesses expected to be below the prior year level In 2015, currency-neutral revenues of Other Businesses are expected to be below the prior year level (previously: to increase at a double-digit rate). Currency-neutral sales at Reebok-CCM Hockey are projected to grow at a mid-single-digit rate, supported by new product introductions in the key categories skates and protective equipment. At TaylorMade-adidas Golf, currency-neutral revenues are forecasted to decrease versus the prior year level (previously: to grow at a double-digit rate). The slower-than-expected recovery of the golf business reflects the continued weakness in the equipment market, which is projected to continue to negatively impact TaylorMade-adidas Golf s sales development in In addition, further restructuring measures initiated at TaylorMadeadidas Golf during the second quarter are expected to negatively impact TaylorMade-adidas Golf s top-line development in 2015.

45 Interim Group Management Report Subsequent Events and Outlook / Outlook / 02.3 / Currency-neutral retail revenues to increase at a mid-single-digit rate adidas Group currency-neutral retail sales are projected to grow at a mid-single-digit rate (previously: to be around the prior year level), driven by significant increases in ecommerce. Comparable store sales are expected to remain stable compared to the prior year. The Group expects a net decrease of its store base by around 40 adidas and Reebok stores in 2015 (previously: net decrease by around 60 stores). We plan to open around 270 new stores, depending on the availability of desired locations. Approximately 310 stores will be closed over the course of the year, primarily in Russia/CIS. Around 100 stores will be remodelled. Group gross margin expected to be negatively impacted by currency movements In 2015, the adidas Group gross margin is forecasted to be at a level between 47.5% and 48.5% (2014: 47.6%). The more favourable pricing and product mix at both adidas and Reebok together with the more favourable channel mix as a result of the further expansion and improvement of our controlled space initiatives are expected to positively influence the Group s gross margin development. However, adverse currency movements in emerging markets, in particular in Russia/CIS, as well as lower product margins at TaylorMade-adidas Golf are projected to negatively impact the Group s gross margin development. The wider than usual target corridor reflects the continued high degree of uncertainty regarding future currency movements. Group other operating expenses as a percentage of sales around prior year level In 2015, the Group s other operating expenses as a percentage of sales are expected to be around the prior year level (2014: 42.7%). Sales and marketing working budget as a percentage of sales is projected to increase versus the prior year. Given the robust momentum at adidas and Reebok, we are stepping up marketing and point-of-sale investments in 2015 to secure and drive brand desirability and, as a result, generate faster growth rates and market share gains, particularly in developed markets such as North America and Western Europe. As part of these marketing / adidas Group 2015 outlook 1) Previous guidance 2) Currency-neutral sales development (in %): adidas Group mid-single-digit rate increase Western Europe double-digit rate increase mid-single-digit rate increase North America low- to mid-single-digit rate increase Greater China double-digit rate increase high-single-digit rate increase Russia/CIS decline Latin America mid-single-digit rate increase low- to mid-single-digit rate increase Japan low-single-digit rate increase MEAA double-digit rate increase high-single-digit rate increase Other Businesses below prior year level double-digit rate increase TaylorMade-adidas Golf below prior year level double-digit rate increase Reebok-CCM Hockey mid-single-digit rate increase Gross margin 47.5% to 48.5% Other operating expenses in % of sales around prior year level Operating margin 3) 6.5% to 7.0% Net income from continuing operations 3) to increase at a rate of 7% to 10% Average operating working capital in % of sales moderate decline Capital expenditure around 600 million Store base net decrease by around 40 stores net decrease by around 60 stores Gross borrowings moderate decline 1) Figures reflect continuing operations as a result of the planned divestiture of the Rockport business. 2) Figures as published on May 5, ) Excluding goodwill impairment.

46 Interim Group Management Report Subsequent Events and Outlook / Outlook / 02.3 / efforts, both adidas and Reebok launched major brand campaigns at the beginning of the year. Operating overhead expenditure as a percentage of sales is forecasted to be around the level recorded in We expect the number of employees within the adidas Group to increase versus the prior year level. The adidas Group will continue to spend around 1% of Group sales on research and development in Areas of particular focus include cushioning and energy solutions, lightweight and digital sports technologies as well as sustainable product innovation. Additionally, investments and research emphasis will also include areas such as new manufacturing processes and advanced materials to drive the development of innovative products and industry-changing manufacturing approaches. Operating margin excluding goodwill impairment to be between 6.5% and 7.0% In 2015, we expect the operating margin excluding goodwill impairment for the adidas Group to be at a level between 6.5% and 7.0% (2014 excluding goodwill impairment losses: 6.6%). This development will be strongly influenced by currency movements. Net income from continuing operations excluding goodwill impairment to increase at a rate of 7% to 10% Net income from continuing operations excluding goodwill impairment is projected to increase at a rate of 7% to 10%, thus outpacing the Group s expected top-line development (2014: net income from continuing operations excluding goodwill impairment losses of 642 million). Interest rate expenses in 2015 are forecasted to remain at the prior year level, as the positive effects from lower interest rates as a result of the issuance of two Eurobonds will be offset by higher debt levels. Net foreign exchange losses in the financial result are expected to be below the prior year level. The Group s tax rate is expected to be at a level of around 30.0% in 2015 (previously: 29.5%) and thus above the prior year level (2014: 29.7%). 46 Average operating working capital as a percentage of sales to decrease moderately In 2015, average operating working capital as a percentage of sales is expected to decrease moderately compared to the prior year level (2014: 22.4%). This is mainly due to working capital improvements we expect to achieve as we move through the year. Capital expenditure of around 600 million In 2015, capital expenditure is expected to increase to a level of around 600 million (2014: 554 million). Investments will mainly focus on adidas and Reebok controlled space initiatives in emerging markets as well as in Western Europe and North America. These investments will account for the majority of total capital expenditure in Other areas of investment include the Group s logistics infrastructure as well as the further development of the adidas Group headquarters in Herzogenaurach. All investments within the adidas Group in 2015 are expected to be fully financed through cash generated from operating activities. Excess cash to be used to support growth initiatives In 2015, we expect continued positive cash flow from operating activities. Cash will be used to finance working capital needs, investment activities, dividend payments as well as the Group s share buyback programme. We intend to largely use excess cash to invest in our growth activities, in particular the further expansion and improvement of our controlled space initiatives. In 2015, gross borrowings of 328 million will mature. In order to ensure long-term flexibility, we aim to maintain a ratio of net borrowings over EBITDA of less than two times as measured at year-end (2014: 0.1).

47 Interim Group Management Report Subsequent Events and Outlook / Management Assessment of Overall Risks and Opportunities / 02.3 / Management Assessment of Overall Risks and Opportunities Management aggregates all risks reported by the business units and functions. Taking into account the occurrence likelihood and the potential financial impact of the risks explained in the 2014 Annual Report, as well as the current business outlook, adidas Group Management does not foresee any material jeopardy to the viability of the Group as a going concern. Management remains confident that the Group s earnings strength forms a solid basis for our future business development and provides the necessary resource to pursue the opportunities available to the Group. Compared to the assessment in the 2014 Annual Report, overall the Group s risk profile remains unchanged. 43 / Upcoming product launches in the remainder of 2015 Product Brand Juventus club kit Manchester United club kit Springblade problade running shoe Ultra Boost running shoe fall/winter editions adizero xt prime Boost running shoe ClimaHeat Rocket Boost running shoe D Rose 773 IV basketball shoe Crazylight Boost prime basketball shoe J Wall 2 basketball shoe Messi training collection ClimaHeat training collection Standard 19 training collection alloutdoor apparel line Originals Superstar Supershell shoe Originals Tubular shoe adidas NEO for Selena Gomez autumn collection Nano 5.0 training shoe Cushion 3.0 running shoe RBZ SpeedBurner stick JetSpeed skate adidas adidas adidas adidas adidas adidas adidas adidas adidas adidas adidas adidas adidas adidas adidas adidas Reebok Reebok CCM CCM 47

48 1 Interim Consolidated Financial Statements (IFRS) Responsibility Statement / 03.1 / Responsibility Statement To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the interim Group management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the material opportunities and risks associated with the expected development of the Group for the remaining months of the financial year. Herzogenaurach, August 3, HERBERT HAINER CEO ROLAND AUSCHEL Global Sales GLENN BENNETT Global Operations ERIC LIEDTKE Global Brands ROBIN J. STALKER CFO

49 2 Interim Consolidated Financial Statements (IFRS) Consolidated Statement of Financial Position / 03.2 / Consolidated Statement of Financial Position.. / adidas AG Consolidated Statement of Financial Position (IFRS) ( in millions) June 30, 2015 June 30, 2014 Change in % December 31, 2014 ASSETS Cash and cash equivalents 959 1,191 (19.5) 1,683 Short-term financial assets Accounts receivable 2,271 2, ,946 Other current financial assets Inventories 2,927 2, ,526 Income tax receivables (15.8) 92 Other current assets Assets classified as held for sale , Total current assets 7,397 6, ,347 Property, plant and equipment 1,504 1, ,454 Goodwill 1,201 1,209 (0.7) 1,169 Trademarks 1,554 1, ,432 Other intangible assets Long-term financial assets Other non-current financial assets Deferred tax assets Other non-current assets Total non-current assets 5,357 4, , Total assets 12,754 11, ,417 Rounding differences may arise in percentages and totals.

50 Interim Consolidated Financial Statements (IFRS) Consolidated Statement of Financial Position / 03.2 /.. / adidas AG Consolidated Statement of Financial Position (IFRS) ( in millions) June 30, 2015 June 30, 2014 Change in % December 31, 2014 LIABILITIES AND EQUITY Short-term borrowings (53.3) 288 Accounts payable 1,712 1,752 (2.3) 1,652 Other current financial liabilities Income taxes Other current provisions Current accrued liabilities 1,468 1, ,249 Other current liabilities Liabilities classified as held for sale 51 n.a. 46 Total current liabilities 4,887 4,984 (1.9) 4,378 Long-term borrowings 1, ,584 Other non-current financial liabilities 9 11 (23.8) 9 Pensions and similar obligations Deferred tax liabilities Other non-current provisions Non-current accrued liabilities Other non-current liabilities Total non-current liabilities 2,330 1, ,422 Share capital (4.3) Reserves Retained earnings 4,607 4,993 (7.7) 4,839 Shareholders equity 5,548 5, ,624 Non-controlling interests (11) (9) 18.2 (7) Total equity 5,537 5, ,618 Total liabilities and equity 12,754 11, ,417 Rounding differences may arise in percentages and totals.

51 3 Interim Consolidated Financial Statements (IFRS) Consolidated Income Statement / 03.3 / Consolidated Income Statement.. / adidas AG Consolidated Income Statement (IFRS) ( in millions) Change Second quarter 2015 Second quarter 2014 Change Net sales 7,990 6, % 3,907 3, % Cost of sales 4,093 3, % 2,018 1, % Gross profit 3,897 3, % 1,889 1, % (% of net sales) 48.8% 49.2% (0.4pp) 48.3% 49.2% (0.9pp) Royalty and commission income % % Other operating income (28.7%) (6.0%) Other operating expenses 3,420 2, % 1,720 1, % (% of net sales) 42.8% 43.5% (0.7pp) 44.0% 44.6% (0.6pp) Goodwill impairment losses 18 n.a. Operating profit % % (% of net sales) 7.2% 7.6% (0.4pp) 6.0% 6.4% (0.4pp) Financial income % % Financial expenses (18.6%) (14.4%) Income before taxes % % (% of net sales) 7.1% 7.2% (0.1pp) 5.8% 6.0% (0.2pp) Income taxes % % (% of income before taxes) 32.9% 29.0% 3.9pp 35.1% 29.2% 6.0pp Net income from continuing operations % % (% of net sales) 4.8% 5.1% (0.3pp) 3.7% 4.2% (0.5pp) (Losses)/gains from discontinued operations, net of tax (13) (1) 950.2% 1 2 (24.6%) 51 Net income % % (% of net sales) 4.6% 5.1% (0.5pp) 3.8% 4.3% (0.5pp) Net income attributable to shareholders % % (% of net sales) 4.6% 5.1% (0.5pp) 3.7% 4.2% (0.5pp) Net income attributable to non-controlling interests % 1 1 (0.9%) Basic earnings per share from continuing operations (in ) % % Diluted earnings per share from continuing operations (in ) % % Basic earnings per share from continuing and discontinued operations (in ) % % Diluted earnings per share from continuing and discontinued operations (in ) % % Rounding differences may arise in percentages and totals.

52 4 Interim Consolidated Financial Statements (IFRS) Consolidated Statement of Comprehensive Income / 03.4 / Consolidated Statement of Comprehensive Income.. / adidas AG Consolidated Statement of Comprehensive Income (IFRS) ( in millions) Net income after taxes Items of other comprehensive income that will not be reclassified subsequently to profit or loss Remeasurements of defined benefit plans (IAS 19), net of tax 1) (2) (0) Subtotal of items of other comprehensive income that will not be reclassified subsequently to profit or loss (2) (0) Items of other comprehensive income that will be reclassified subsequently to profit or loss when specific conditions are met Net loss on cash flow hedges, net of tax (154) (3) Currency translation differences 317 (8) Subtotal of items of other comprehensive income that will be reclassified subsequently to profit or loss when specific conditons are met 162 (11) Other comprehensive income 160 (11) Total comprehensive income Attributable to shareholders of adidas AG Attributable to non-controlling interests 2 2 1) Includes actuarial gains or losses relating to defined benefit obligations, return on plan assets (excluding interest income) and the asset ceiling effect. Rounding differences may arise in percentages and totals. 52

53 5 Interim Consolidated Financial Statements (IFRS) Consolidated Statement of Changes in Equity / 03.5 / Consolidated Statement of Changes in Equity.. / adidas AG Consolidated Statement of Changes in Equity (IFRS) ( in millions) Share capital Capital reserve Cumulative currency translation differences Hedging reserve Other reserves 1) Retained earnings Shareholders equity Noncontrolling interests Total equity Balance at December 31, (363) (34) (59) 4,959 5,489 (8) 5,481 Net income recognised directly in equity (7) (3) (0) (11) (0) (11) Net income Total comprehensive income (7) (3) (0) Dividend payment (314) (314) (4) (318) Balance at June 30, (370) (38) (60) 4,993 5,513 (9) 5,503 Balance at December 31, (257) 176 (117) 4,839 5,624 (7) 5,618 Net income recognised directly in equity 317 (154) (2) 161 (1) 160 Net income Total comprehensive income 317 (154) (2) Repurchase of treasury shares (4) (297) (301) (301) Dividend payment (303) (303) (6) (309) Balance at June 30, (119) 4,607 5,548 (11) 5,537 1) Reserves for remeasurements of defined benefit plans (IAS 19), option plans and acquisition of shares from non-controlling interest shareholders. Rounding differences may arise in percentages and totals.

54 6 Interim Consolidated Financial Statements (IFRS) Consolidated Statement of Cash Flows / 03.6 / Consolidated Statement of Cash Flows.. / adidas AG Consolidated Statement of Cash Flows (IFRS) ( in millions) Operating activities: Income before taxes Adjustments for: Depreciation, amortisation and impairment losses Reversals of impairment losses (1) (1) Unrealised foreign exchange losses, net 56 7 Interest income (9) (11) Interest expense Losses on sale of property, plant and equipment, net 4 2 Operating profit before working capital changes Increase in receivables and other assets (440) (263) Increase in inventories (344) (276) Increase/(decrease) in accounts payable and other liabilities 123 (111) Cash generated from operations before interest and taxes Interest paid (18) (19) Income taxes paid (200) (149) Net cash used in operating activities continuing operations (48) (147) Net cash generated from/(used in) operating activities discontinued operations 17 (4) Net cash used in operating activities (31) (151) Investing activities: 54 Purchase of trademarks and other intangible assets (12) (18) Proceeds from sale of trademarks and other intangible assets 0 1 Purchase of property, plant and equipment (126) (244) Proceeds from sale of property, plant and equipment 1 2 Acquisition of subsidiaries and other business units net of cash acquired (7) Proceeds from sale of short-term financial assets 0 36 Purchase of investments and other long-term assets (7) (19) Interest received 9 11 Net cash used in investing activities continuing operations (141) (231) Net cash used in investing activities discontinued operations (4) (2) Net cash used in investing activities (145) (233) Financing activities: Repayments of long-term borrowings (9) Repayments of finance lease obligations (1) (1) Dividend paid to shareholders of adidas AG (303) (314) Dividend paid to non-controlling interest shareholders (6) (4) Repurchase of treasury shares (301) Proceeds from short-term borrowings Repayments of short-term borrowings (56) Net cash used in financing activities (588) (10) Effect of exchange rates on cash 41 (2) Decrease of cash and cash equivalents (724) (396) Cash and cash equivalents at beginning of the year 1,683 1,587 Cash and cash equivalents at end of the period 959 1,191 Rounding differences may arise in percentages and totals.

55 7 Interim Consolidated Financial Statements (IFRS) Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, 2015 / 03.7 / Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, General The interim consolidated financial statements of adidas AG and its direct and indirect subsidiaries (collectively the Group ) for the first half year ending June 30, 2015 are prepared in compliance with International Financial Reporting Standards (IFRS), as adopted by the European Union (EU). The Group applied all International Financial Reporting Standards issued by the International Accounting Standards Board (IASB) and Interpretations of the IFRS Interpretations Committee effective as at June 30, These interim consolidated financial statements have been prepared in compliance with International Accounting Standard IAS 34 Interim Financial Reporting and with German Accounting Standard GAS 16 Interim Financial Reporting. Accordingly, these interim consolidated financial statements do not include all of the information and notes required for consolidated financial statements at financial year-ends. Therefore, these interim consolidated financial statements should be read in conjunction with the 2014 annual consolidated financial statements. The accounting policies as well as principles and practices applied in the consolidated financial statements for the year ending December 31, 2014 also apply to the interim consolidated financial statements for the first half year ending June 30, An exemption to this principle is the application of new/revised standards and interpretations which are effective for financial years starting from January 1, The application of new/revised standards does not have any material impact on the Group s financial position, results of operations and cash flows. The interim consolidated financial statements and the interim Group management report have not been audited in accordance with 317 German Commercial Code (Handelsgesetzbuch HGB) or reviewed by an auditor. Costs that are incurred unevenly during the financial year are anticipated or deferred in the interim consolidated financial statements only if it would be also appropriate to anticipate or defer such costs at the end of the financial year. The results of operations for the first half year ending June 30, 2015 are not necessarily indicative of results to be expected for the entire year. The interim consolidated financial statements are presented in euros ( ) and, unless otherwise stated, all values are presented in millions of euros ( in millions). Due to rounding principles, numbers presented may not sum up exactly to totals provided.

56 Interim Consolidated Financial Statements (IFRS) Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, 2015 / 03.7 / 02 Seasonality The sales of the Group in certain product categories are seasonal and therefore revenues and attributable earnings may vary within the financial year. Sales and earnings tend to be strongest in the first and third quarters of the financial year because these coincide with the launch of the spring/summer and fall/winter collections, respectively. This is especially relevant for the adidas and Reebok brands, whose sales account for approximately 90% of the Group s net sales. However, shifts in the share of sales and attributable earnings of particular product categories, brands or the regional composition may occur throughout the year. 03 Discontinued operations At December 31, 2014, due to concrete plans to sell the Rockport operating segment, divestiture within the next twelve months was considered as highly probable. As a consequence, the Rockport operating segment was reported as discontinued operations for the first time in the 2014 consolidated financial statements. The 2014 figures of the consolidated income statement and the consolidated statement of cash flows have been restated to show the discontinued operations separately from continuing operations. On January 23, 2015, the adidas Group signed a definitive agreement to sell the Rockport operating segment. The transaction is subject to customary closing conditions. As a result, the Rockport operating segment is further reported as discontinued operations as at June 30, see Note 12, p The results of the Rockport operating segment are shown as discontinued operations in the consolidated income statement for all periods: Discontinued operations ( in millions) Net sales Expenses (141) (120) Loss from operating activities (3) (2) Income taxes 1 0 Loss from operating activities, net of tax (2) (1) Loss recognised on the measurement to fair value less costs to sell (15) Income taxes 5 Loss recognised on the measurement to fair value less costs to sell, net of tax (11) Loss from discontinued operations, net of tax (13) (1) Basic earnings per share from discontinued operations ( ) (0.06) (0.01) Diluted earnings per share from discontinued operations ( ) (0.06) (0.01) The loss from discontinued operations for the first half year ending June 30, 2015 in an amount of 13 million (2014: loss of 1 million) is entirely attributable to the shareholders of adidas AG.

57 Interim Consolidated Financial Statements (IFRS) Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, 2015 / 03.7 / 04 Acquisitions Effective January 2, 2015, Reebok International Limited completed the acquisition of Refuel (Brand Distribution) Limited ( Refuel ) and consequently owns 100% of the voting rights. Based in London (UK), Refuel mainly markets and distributes apparel of Mitchell & Ness. With this acquisition, the adidas Group has taken over all distribution rights of Mitchell & Ness in Europe. The entire business of Refuel was acquired for a purchase price of GBP 10.6 million in cash. The acquisition had the following effect on the Group s assets and liabilities, based on a preliminary purchase price allocation: Net assets of Refuel (Brand Distribution) Limited at the acquisition date ( in millions) Pre-acquisition carrying amounts Fair value adjustments Recognised values on acquisition Cash and cash equivalents 6 6 Accounts receivable 2 2 Inventories 1 1 Property, plant and equipment 0 0 Other intangible assets 6 6 Accounts payable (1) (1) Deferred tax liabilities (0) (0) Net assets Goodwill arising on acquisition 57 Purchase price settled in cash 14 Less: cash and cash equivalents acquired (6) Cash outflow on acquisition 7 The acquired subsidiary generated net sales in an amount of 5 million as well as losses in an amount of 0 million for the period from January 2 to June 30, Assets/liabilities classified as held for sale At June 30, 2015, part of the assets of adidas AG, which mainly comprise land amounting to 11 million (December 31, 2014: 11 million), are still presented as held for sale following a signed contract of sale, which is still awaiting certain conditions to be fulfilled that are not in the area of influence of the adidas Group. In addition, at June 30, 2015 and December 31, 2014, all assets and liabilities of the Rockport operating segment are presented as a disposal group held for sale due to the signing of a definitive agreement and due to the concrete plans to sell the operating segment, respectively. The Rockport operating segment is part of Other Businesses.

58 Interim Consolidated Financial Statements (IFRS) Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, 2015 / 03.7 / For the first half year ending June 30, 2015, impairment losses (before transaction costs) of 11 million (2014: 0 million) for write-downs of the disposal group Rockport to the lower of its carrying amount and its fair value less costs to sell have been included in Loss from discontinued operations, net of tax. At June 30, 2015, the fair value less costs to sell amounts to 204 million (December 31, 2014: 211 million). The impairment losses have been applied to reduce the carrying amount of goodwill, trademarks and other intangible assets as well as property, plant and equipment. see Note 03, p. 56 At June 30, 2015 and at December 31, 2014, the disposal group Rockport was stated at fair value less costs to sell and comprised the following major classes of assets and liabilities: Classes of assets and liabilities ( in millions) June 30, 2015 Dec. 31, 2014 Accounts receivable Other current financial assets 2 1 Inventories Other current assets 3 0 Total current assets Property, plant and equipment 8 7 Trademarks Other intangible assets 1 1 Other non-current financial assets 1 0 Other non-current assets Total non-current assets Total assets Accounts payable Other current financial liabilities 1 0 Other current provisions 2 1 Current accrued liabilities 6 6 Other current liabilities 2 2 Total current liabilities Other non-current liabilities 0 Total non-current liabilities 0 Total liabilities The non-recurring fair value measurement for the disposal group has been categorised as a Level 3 fair value. The fair value is based on the sale and purchase agreement for the Rockport business which was signed on January 23, 2015.

59 Interim Consolidated Financial Statements (IFRS) Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, 2015 / 03.7 / 06 Goodwill Due to the implementation of an omni-channel sales approach in connection with the new organisational structure and the associated change in segmental reporting, the carrying amounts of acquired goodwill have been reallocated to the new groups of cash-generating units. The groups of cash-generating units are defined as the regional markets which are responsible for the joint distribution of adidas and Reebok as well as the already existing and unchanged operating segments TaylorMade-adidas Golf and Reebok-CCM Hockey. The regional markets are: Western Europe, North America, Greater China, Russia/CIS, Latin America, Japan, Middle East, South Korea and Southeast Asia/Pacific. Due to the cessation of the subdivision into the distribution channels Wholesale and Retail in the regional markets as well as the consolidation of the former markets Brazil and SLAM (Latin America excluding Brazil) into the new market Latin America, the number of groups of cash-generating units, to which goodwill is allocated, decreased from 22 to 11 compared to December 31, This did not result in a new composition of cash-generating units. However, the monitoring of goodwill is not performed on the same level anymore. At June 30, 2015, the group of cash-generating units Rockport is still classified as discontinued operations and is shown in Assets/liabilities classified as held for sale due to the concrete plans to divest the operating segment. The allocation of goodwill to the new groups of cash-generating units was performed in the first quarter of 2015 by aggregating goodwill so far allocated to Wholesale and Retail within the regional markets. The carrying amounts of acquired goodwill allocated to the respective groups of cash-generating units are as follows: 59 Allocation of goodwill ( in millions) June 30, 2015 Jan. 1, 2015 Western Europe Greater China TaylorMade-adidas Golf Other Total 1,201 1,169 Other comprises the groups of cash-generating units for which the respective carrying amount of allocated goodwill is not significant in comparison with the Group s total carrying amount of goodwill. Goodwill allocated to the groups of cash-generating units North America and Reebok-CCM Hockey was already fully impaired at December 31, Due to a change in the composition of the Group s reportable segments and associated cash-generating units respectively, the Group assessed whether goodwill impairment is required in the first quarter of The underlying value drivers and key assumptions for impairment testing purposes remained in principle unchanged compared to the impairment test performed for the consolidated financial statements at December 31, 2014.

60 Interim Consolidated Financial Statements (IFRS) Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, 2015 / 03.7 / Goodwill impairment losses in the first quarter of 2015 amounted to 18 million. Due to the consolidation of the groups of cash-generating units Retail SLAM and Retail Brazil with Wholesale SLAM and Wholesale Brazil as well as Retail Russia/CIS with Wholesale Russia/CIS, the carrying amount of the respective new groups of cash-generating units Latin America and Russia/CIS was determined to be higher than the recoverable amount of 438 million and 130 million, respectively. The goodwill impairment amount comprises impairment losses of 15 million within the segment Latin America and 3 million within the segment Russia/CIS. Goodwill for these groups of cash-generating units is completely impaired. Due to an adjustment in TaylorMade-adidas Golf s net sales and earnings outlook in the second quarter of 2015 for the 2015 financial year, the Group assessed whether the corresponding goodwill is impaired. Financial planning for TaylorMade-adidas Golf was adjusted based on the net sales and earnings outlook for the current year as well as the best possible assessment of future developments and, in addition, selected underlying value drivers were updated compared to the most recent impairment test. The impairment test did not lead to an impairment of goodwill. However, there is an increased risk of potential goodwill impairment within the cash-generating unit TaylorMade-adidas Golf. Future changes in expected cash flows and discount rates may lead to impairments of the reported goodwill in the future. The reconciliation of goodwill is as follows: Reconciliation of goodwill, net ( in millions) 60 Western Europe Greater China TaylorMadeadidas Golf Other Total January 1, ,169 Currency translation differences Impairment losses (18) (18) June 30, ,201

61 Interim Consolidated Financial Statements (IFRS) Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, 2015 / 03.7 / 07 Shareholders equity In the period from January 1, 2015 to June 30, 2015, the nominal capital of adidas AG ( the company ) did not change. Consequently, on June 30, 2015, the nominal capital of adidas AG amounted to 209,216,186, divided into 209,216,186 registered no-par-value shares ( registered shares ). Based on the authorisation to repurchase treasury shares granted to the Executive Board of adidas AG by the Annual General Meeting on May 8, 2014, the share buyback programme of the company commenced on November 7, 2014, with the first tranche, which was concluded on December 12, The share buyback programme was resumed on March 6, 2015 in the form of a second tranche which was concluded on June 15, The total number of shares repurchased within the second tranche of the share buyback programme in the period from March 6, 2015 up to and including June 15, 2015, amounted to 4,129,627 shares. This corresponded to a notional amount of 4,129,627 in the nominal capital and consequently 1.97% of the nominal capital of the company. The shares were repurchased at an average price of In the context of the second tranche, shares in the total amount of 299,999,992 (excluding incidental purchasing costs) were repurchased. On April 9, 2015, the company exceeded (including the shares repurchased in 2014) the threshold of 3% of shares in adidas AG reportable in accordance with 26 section 1 sentence 2 German Securities Trading Act (Wertpapierhandelsgesetz WpHG). At that time, the voting rights amounted to 3.002% (6,281,429 shares). 61 As at the balance sheet date, the company held a total of 9,018,769 treasury shares (including the shares repurchased in 2014), corresponding to a notional amount of 9,018,769 in the nominal capital and consequently 4.31% of the nominal capital. In accordance with 71b German Stock Corporation Act (Aktiengesetz - AktG), the treasury shares held directly or indirectly do not confer any rights to the company.

62 Interim Consolidated Financial Statements (IFRS) Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, 2015 / 03.7 / 08 Financial instruments Carrying amounts of financial instruments as at June 30, 2015, according to categories of IAS 39 and their fair values ( in millions) Category according to IAS 39 Carrying amount June 30, 2015 Measurement according to IAS 39 Amortised cost Fair value recognised in equity Fair value recognised in net income Measurement according to IAS 17 Fair value June 30, 2015 Financial assets Cash and cash equivalents n.a Short-term financial assets FAHfT Accounts receivable LaR 2,271 2,271 2,271 Other current financial assets Derivatives being part of a hedge n.a Derivatives not being part of a hedge FAHfT Other financial assets LaR Long-term financial assets Other equity investments FAHfT Available-for-sale financial assets AfS Loans LaR Other non-current financial assets Derivatives being part of a hedge n.a. Derivatives not being part of a hedge FAHfT Other financial assets LaR Assets classified as held for sale LaR Financial liabilities Short-term borrowings Bank borrowings FLAC Private placements FLAC Eurobond FLAC Convertible bond FLAC Accounts payable FLAC 1,712 1,712 1,712 Current accrued liabilities FLAC Other current financial liabilities Derivatives being part of a hedge n.a Derivatives not being part of a hedge FLHfT Other financial liabilities FLAC Finance lease obligations n.a Long-term borrowings Bank borrowings FLAC Private placements FLAC Eurobond FLAC Convertible bond FLAC Non-current accrued liabilities FLAC Other non-current financial liabilities Derivatives being part of a hedge n.a. Derivatives not being part of a hedge FLHfT Other financial liabilities FLAC Finance lease obligations n.a Liabilities classified as held for sale FLAC Thereof: aggregated by category according to IAS 39 Financial assets at fair value through profit or loss 121 Thereof: designated as such upon initial recognition (Fair Value Option FVO) Thereof: Held for Trading (FAHfT) 121 Loans and Receivables (LaR) 2,472 Available-for-Sale Financial Assets (AfS) 55 Financial Liabilities Measured at Amortised Cost (FLAC) 4,264 Financial Liabilities at fair value through profit or loss Held for Trading (FLHfT) 13

63 Interim Consolidated Financial Statements (IFRS) Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, 2015 / 03.7 / Carrying amounts of financial instruments as at December 31, 2014, according to categories of IAS 39 and their fair values ( in millions) Category according to IAS 39 Carrying amount Dec. 31, 2014 Measurement according to IAS 39 Amortised cost Fair value recognised in equity Fair value recognised in net income Measurement according to IAS 17 Fair value Dec. 31, 2014 Financial assets Cash and cash equivalents n.a. 1,683 1,683 1,683 Short-term financial assets FAHfT Accounts receivable LaR 1,946 1,946 1,946 Other current financial assets Derivatives being part of a hedge n.a Derivatives not being part of a hedge FAHfT Other financial assets LaR Long-term financial assets Other equity investments FAHfT Available-for-sale financial assets AfS Loans LaR Other non-current financial assets Derivatives being part of a hedge n.a Derivatives not being part of a hedge FAHfT Other financial assets LaR Assets classified as held for sale LaR Financial liabilities Short-term borrowings Bank borrowings FLAC Private placements FLAC Eurobond FLAC Convertible bond FLAC Accounts payable FLAC 1,652 1,652 1,652 Current accrued liabilities FLAC Other current financial liabilities Derivatives being part of a hedge n.a Derivatives not being part of a hedge FLHfT Other financial liabilities FLAC Finance lease obligations n.a Long-term borrowings Bank borrowings FLAC Private placements FLAC Eurobond FLAC ,000 Convertible bond FLAC Non-current accrued liabilities FLAC Other non-current financial liabilities Derivatives being part of a hedge n.a. Derivatives not being part of a hedge FLHfT Other financial liabilities FLAC Finance lease obligations n.a Liabilities classified as held for sale FLAC Thereof: aggregated by category according to IAS 39 Financial assets at fair value through profit or loss 141 Thereof: designated as such upon initial recognition (Fair Value Option FVO) Thereof: Held for Trading (FAHfT) 141 Loans and Receivables (LaR) 2,152 Available-for-Sale Financial Assets (AfS) 49 Financial Liabilities Measured at Amortised Cost (FLAC) 4,110 Financial Liabilities at fair value through profit or loss Held for Trading (FLHfT) 11

64 Interim Consolidated Financial Statements (IFRS) Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, 2015 / 03.7 / Fair value hierarchy of financial instruments according to IFRS 13 as at June 30, 2015 ( in millions) Fair value June 30, 2015 Level 1 Level 2 Level 3 Short-term financial assets 5 5 Derivative financial instruments Derivatives being part of a hedge Derivatives not being part of a hedge Long-term financial assets ) Financial assets Short-term borrowings Derivative financial instruments Derivatives being part of a hedge Derivatives not being part of a hedge Long-term borrowings 1,553 1,458 Financial liabilities 2,106 1, Fair value Jan. 1, 2015 Gains Losses Fair value June 30, ) This category relates to an 8.33% investment in FC Bayern München AG of 80 million. Dividends are distributed by FC Bayern München AG instead of regular interest payments. These dividends are recognised in other financial income Level 1 is based on quoted prices in active markets for identical assets or liabilities. Level 2 is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3 is based on inputs for the asset or liability that are not based on observable market data (unobservable inputs). 64

65 Interim Consolidated Financial Statements (IFRS) Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, 2015 / 03.7 / Fair value hierarchy of financial instruments according to IFRS 13 as at December 31, 2014 ( in millions) Fair value Dec. 31, 2014 Level 1 Level 2 Level 3 Short-term financial assets 5 5 Derivative financial instruments Derivatives being part of a hedge Derivatives not being part of a hedge Long-term financial assets ) Financial assets Short-term borrowings Derivative financial instruments Derivatives being part of a hedge Derivatives not being part of a hedge Long-term borrowings 1,674 1, Financial liabilities 2,023 1, Fair value Jan. 1, 2014 Gains Losses Fair value Dec. 31, ) This category relates to an 8.33% investment in FC Bayern München AG of 80 million. Dividends are distributed by FC Bayern München AG instead of regular interest payments. These dividends are recognised in other financial income Level 1 is based on quoted prices in active markets for identical assets or liabilities. Level 2 is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3 is based on inputs for the asset or liability that are not based on observable market data (unobservable inputs). 65 The valuation methods used in measuring Level 1, Level 2 and Level 3 fair values remain unchanged and can be found in the notes to the 2014 consolidated financial statements. 09 Other operating income and other operating expenses Other operating income mainly includes income from the release of accrued liabilities and other provisions as well as sundry income. Other operating expenses include expenses for marketing, sales and research and development, as well as for logistics and central administration. In addition, they include impairment losses as well as depreciation on tangible assets and amortisation on intangible assets (except goodwill impairment losses), with the exception of depreciation and amortisation which is included in the cost of sales. In the first half of 2015, depreciation and amortisation expense for tangible and intangible assets (excluding goodwill) and impairment losses amounted to 158 million (2014: 142 million).

66 Interim Consolidated Financial Statements (IFRS) Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, 2015 / 03.7 / 10 Earnings per share Basic earnings per share from continuing operations are calculated by dividing the net income from continuing operations attributable to shareholders by the weighted average number of shares outstanding during the year, excluding ordinary shares purchased by the adidas Group and held as treasury shares. Basic earnings per share from continuing and discontinued operations are calculated by dividing the net income attributable to shareholders by the weighted average number of shares outstanding during the year, excluding ordinary shares purchased by the adidas Group and held as treasury shares. It is not necessary to include dilutive potential shares arising from the convertible bond issuance in March 2012 in the calculation of diluted earnings per share for the first half year ending June 30, 2015 as the conversion right has no value at the balance sheet date. The average share price reached per share during the first half of 2015 and thus did not exceed the conversion price of per share. As a consequence of contractual provisions relating to dividend protection, the conversion price was adjusted from to per share. This adjustment became effective on May 8, Earnings per share Net income from continuing operations ( in millions) Net income attributable to non-controlling interests ( in millions) 3 3 Net income from continuing operations attributable to shareholders ( in millions) Weighted average number of shares 202,897, ,216,186 Basic and diluted earnings per share from continuing operations (in ) Net income attributable to shareholders ( in millions) Weighted average number of shares 202,897, ,216,186 Basic and diluted earnings per share from continuing and discontinued operations (in ) Further information on basic and diluted earnings per share from discontinued operations is provided in Note 03. see Note 03, p. 56

67 Interim Consolidated Financial Statements (IFRS) Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, 2015 / 03.7 / 11 Segmental information In connection with the new strategic business plan announced at the beginning of 2015, the Group has realigned its internal organisational structure and changed the composition of its reportable segments accordingly. The new organisational structure is based on a Group-wide omni-channel go-to-market approach. The internal reporting of the Group for management purposes for the brands adidas and Reebok is structured by markets rather than by distribution channels. As a consequence, of the six initial operating segments, the operating segments Wholesale and Retail were replaced by regional markets. Reflecting this development, the Group has restated the segmental information for the first half year ending June 30, 2014 and for the year ending December 31, Following the Group s new internal management reporting by markets and in accordance with the definition of IFRS 8 Operating Segments, 13 operating segments were identified: Western Europe, North America, Greater China, Russia/CIS, Latin America, Japan, Middle East, South Korea, Southeast Asia/Pacific, TaylorMade-adidas Golf, Rockport, Reebok-CCM Hockey and Other centrally managed businesses. The markets Middle East, South Korea and Southeast Asia/Pacific were aggregated to the segment MEAA ( Middle East, Africa and other Asian markets ). According to the criteria of IFRS 8 for reportable segments, the business segments Western Europe, North America, Greater China, Russia/CIS, Latin America, Japan and MEAA are reported separately. The remaining operating segments are aggregated under Other Businesses due to their only subordinate materiality. Each market comprises all wholesale, retail and e-commerce business activities relating to the distribution and sale of adidas and Reebok products to retail customers and end consumers. 67 The operating segment TaylorMade-adidas Golf comprises the brands TaylorMade, adidas Golf, Adams Golf and Ashworth. Other centrally managed businesses primarily includes the business activities of the labels Y-3 and Porsche Design Sport by adidas as well as the business activities of the brand Five Ten in the outdoor action sports sector. Furthermore, the segment also comprises the own-retail activities of the adidas NEO label as well as International Clearance Management. Certain centralised Group functions do not meet the definition of IFRS 8 for a reportable operating segment. This includes functions such as Global Brands and Global Sales (central brand and distribution management for the brands adidas and Reebok), central treasury and global sourcing as well as other headquarter departments. Income and expenses relating to these corporate functions are presented together with other non-allocable items and intersegment eliminations in the reconciliation of segmental operating profit. There are no intersegment sales between the reportable segments. The results of the operating segments are reported in the line item Segmental operating profit. This was formerly defined as gross profit minus costs directly attributable to the segment or the group of segments (primarily sales and logistics costs) before marketing working budget investments and operating overhead costs not directly attributable. As of January 1, 2015, segmental operating profit is defined as gross profit minus other operating expenses (including marketing working budget investments) plus royalty and commission income and other operating income attributable to the segment or group of segments.

68 Interim Consolidated Financial Statements (IFRS) Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, 2015 / 03.7 / Compared to the interim consolidated financial statements for the first half year ending June 30, 2014, the Rockport operating segment is presented as discontinued operations in the segmental reporting. Segmental assets include accounts receivable as well as inventories. Segmental liabilities only contain accounts payable from operating activities as there are no other liability items reported regularly to the chief operating decision maker. Segments I ( in millions) Net sales (non-group) 1) Segmental operating profit 1) Segmental assets 2) Segmental liabilities 2) Western Europe 2,104 1, ,385 1, North America 1, Greater China 1, Russia/CIS Latin America Japan MEAA 1, Other Businesses (continuing operations) (45) (19) Other Businesses (discontinued operations) (7) (2) Other Businesses (total) (52) (20) Total 8,128 6,998 1,394 1,161 5,258 4, ). 2) At June 30. Segments II ( in millions) Capital expenditure 1) Depreciation and amortisation 1) Impairment losses and reversals of impairment losses 1) Western Europe (0) (0) North America Greater China (1) Russia/CIS (1) Latin America Japan MEAA (0) (0) Other Businesses (continuing operations) (0) (0) Other Businesses (discontinued operations) (0) (0) Other Businesses (total) (0) (0) Total (1) (1) 1).

69 Interim Consolidated Financial Statements (IFRS) Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, 2015 / 03.7 / Reconciliations The following tables include reconciliations of segmental information to the aggregate numbers of the consolidated financial statements, taking into account items which are not directly attributable to a segment or a group of segments. Net sales (non-group) ( in millions) Reportable segments 7,248 6,178 Other Businesses Reclassification to discontinued operations (138) (118) Total 7,990 6,880 Operating profit ( in millions) Operating profit for reportable segments 1,445 1,181 Operating profit for Other Businesses (52) (20) Segmental operating profit 1,394 1,161 HQ/Consolidation (512) (378) Central marketing working budget (292) (261) Goodwill impairment losses (18) Reclassification to discontinued operations Operating profit Financial income Financial expenses (32) (40) Income before taxes Operating profit of centralised functions which do not represent a segment, such as Global Brands and Global Sales (central brand and distribution management for the brands adidas and Reebok), central treasury and global sourcing as well as other headquarter departments, is shown under HQ/ Consolidation. Capital expenditure ( in millions) Reportable segments Other Businesses Reclassification to discontinued operations (4) HQ/Consolidation Total

70 Interim Consolidated Financial Statements (IFRS) Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, 2015 / 03.7 / Depreciation and amortisation ( in millions) Reportable segments Other Businesses Reclassification to discontinued operations (4) (3) HQ/Consolidation Total Impairment losses and reversals of impairment losses ( in millions) Reportable segments (1) (1) Other Businesses (0) (0) Reclassification to discontinued operations 0 0 HQ/Consolidation 18 Total 17 (1) Assets ( in millions) June 30, 2015 June 30, Accounts receivable and inventories of reportable segments 4,371 4,096 Accounts receivable and inventories of Other Businesses Segmental assets 5,258 4,936 Non-segmental accounts receivable and inventories Current financial assets 1,323 1,344 Other current assets Non-current assets 5,357 4,953 Reclassification to assets classified as held for sale (130) Total 12,754 11,887 Liabilities ( in millions) June 30, 2015 June 30, 2014 Accounts payable of reportable segments Accounts payable of Other Businesses Segmental liabilities Non-segmental accounts payable 1,165 1,214 Current financial liabilities 609 1,102 Other current liabilities 2,566 2,129 Non-current liabilities 2,330 1,400 Reclassification to liabilities classified as held for sale (40) Total 7,217 6,384

71 Interim Consolidated Financial Statements (IFRS) Selected Explanatory Notes to the Interim Consolidated Financial Statements (IFRS) as at June 30, 2015 / 03.7 / 12 Events after the balance sheet date The sale of the Rockport operating segment was successfully completed on July 31, 2015 with the fulfilment of the closing conditions which were aligned in the agreement signed at the beginning of Between the end of the first half of 2015 and the finalisation of these interim consolidated financial statements on August 3, 2015, there were no other major Group-specific matters which we expect to influence our business materially going forward. Herzogenaurach, August 3, 2015 The Executive Board of adidas AG 71

72 1 Additional Information Executive and Supervisory Boards / 04.1 / Executive and Supervisory Boards Executive Board Herbert Hainer CHIEF EXECUTIVE OFFICER 72 Roland Auschel GLOBAL SALES Glenn Bennett GLOBAL OPERATIONS Eric Liedtke GLOBAL BRANDS Robin J. Stalker CHIEF FINANCIAL OFFICER Biographical information on our Executive Board members as well as on mandates of the members of the Executive Board is available at EXECUTIVE-BOARD

73 Additional Information Executive and Supervisory Boards / 04.1 / Supervisory Board Igor Landau CHAIRMAN Sabine Bauer* DEPUTY CHAIRWOMAN Willi Schwerdtle DEPUTY CHAIRMAN Dieter Hauenstein* Dr. Wolfgang Jäger* Dr. Stefan Jentzsch 73 Herbert Kauffmann Katja Kraus Kathrin Menges Roland Nosko* Hans Ruprecht* Heidi Thaler-Veh* * Employee representative. Biographical information on our Supervisory Board members as well as on mandates of the members of the Supervisory Board is available at SUPERVISORY-BOARD